Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — DUCHY OF LANCASTER

Deregulation

Mr. Spring: To ask the Deputy Prime Minister what assessment he has made of the impact of deregulation initiatives on small businesses. [36746]

The Chancellor of the Duchy of Lancaster (Mr. Roger Freeman): Our assessment is that the package of deregulation measures announced at the "Your Business Matters" conference on 11 March was widely welcomed by small businesses.

Mr. Spring: Given the assistance that has been given to so many small businesses by raising the VAT threshold, cutting corporate taxes and other methods of reducing bureaucracy on small businesses, is it surprising that there has been such a net expansion of small businesses? Given the importance of small businesses in job creation, will my right hon. Friend assure the House that, when he considers the deregulation initiatives, he will continue to take into account the needs of small businesses and continue to consult them widely?

Mr. Freeman: We shall certainly continue closely to consult small businesses. Our aim over the coming months

is to continue the progress already made on simplification of PAYE and national insurance contributions; to ensure that enforcement of the law is uniform and proportionate; and to try to reduce the burdens of forms, surveys and licences on small businesses.

Mr. Grocott: While everyone would agree that it is desirable to cut unnecessary red tape, does the Minister agree that one discipline that must always remain is the proper keeping of accounts? Will he comment on last weekend's reports that some businesses contributing to the so-called Premier Club, which is a method of financing the Conservative party, have been advised to disguise their contributions by describing them as "entertainment"? If that practice exists, will he condemn it unreservedly?

Mr. Freeman: It goes without saying that all companies must observe not only the law relating to company accounts but the Inland Revenue's requirements. I had hoped that the hon. Gentleman would ask me about taxation. Some 500,000 small companies no longer need their accounts audited and more than half a million pay VAT annually.

Mr. Sykes: Has my right hon. Friend had time yet to assess the impact of the 48-hour week that is likely to be imposed on this country from 23 November onwards? Is he aware that Cleveland Potash, a fairly important employer in my constituency, told me that a 48-hour week would be disastrous for the company, and that it would have to lay men off as a result? What will the Minister do about the 48-hour week?

Mr. Freeman: Any restriction in terms of hours and patterns of work on companies' flexibility to employ staff is to be deprecated. The Government want our economy to achieve growth and prosperity, which comes about through limiting the burdens of social and employment legislation on our work force.

HMSO

Mr. Jim Cunningham: To ask the Chancellor of the Duchy of Lancaster what revenue he expects to be raised from the privatisation of HMSO. [36747]

Mr. Freeman: I am confident that the sale will represent good value for money to taxpayers. However, the hon. Member will appreciate that I cannot jeopardise those benefits by releasing details of bids or estimated proceeds at this stage.

Mr. Cunningham: How can the Minister say that the sale will benefit taxpayers when his Department has estimated that it should be sold for £100 million and that it will get less than £50 million if it tries to sell it now? Should not the sale be put on freeze?

Mr. Freeman: Ministers have made no such estimate. The whole purpose of a competition for organisations or agencies that are being privatised is to determine best value for money. HMSO in the private sector can compete with the private sector for private sector business, and can expand without the constraints of operating in the public sector.

Mr. Fabricant: Is my right hon. Friend aware that one of the likely side effects of the privatisation of HMSO is that Hansard will be available on the Internet? Does this not demonstrate the Government's commitment to open government?

Mr. Freeman: With respect, I think that my hon. Friend is a little too enthusiastic about the Internet. I hope that public and private sector agencies—including the House, in due course—will consider the wider use of the Internet.

Mr. Garrett: Is the Minister aware that the three bidders for HMSO have shown precious little interest in expanding its sales in the private sector? Further, is he aware that it looks as though HMSO will be sold for half what was expected and that there are rumours that there will be 600 redundancies, mostly in the headquarters city of Norwich?

Mr. Freeman: The Government have consistently made clear that HMSO would have a further programme of redundancies in the public sector. From the responses of the short-listed bidders, I am not aware that they see matters any differently from the forecast by internal management. I have had meetings with the trade unions and I am well aware that the short-listed bidders are proposing more rapid attention to the financial problems of HMSO. The preferred bidder will be announced in the next few weeks and I hope that it will sketch out its aspirations and plans for HMSO in some detail. I hope that that will result in an expansion of work in the private sector, and therefore in employment prospects throughout the country.

Mr. Derek Foster: Is it not clear that the Chancellor is going to get only half the proceeds that he expected for HMSO and that 600 jobs will be lost, mostly in Norwich? Contrary to his stated reasons for privatising HMSO, is it not clear that all his preferred bidders are far more

concerned to boost HMSO's puny 8 per cent. share of the £3 billion public sector market than to expand sales in the private sector? Has not the Government's stampede to privatise become a car boot sale of civil service jobs and a hand-out of public sector assets and contracts—including some to his fat cat friends who are payrolling the Tory party through the Premier Club?

Mr. Freeman: On employment prospects, the 600 jobs that the right hon. Gentleman referred to are, broadly speaking, within the forecast job redundancies in the public sector. As I understand it, there is no great difference between the forecast made by HMSO management and that made by those interested in acquiring the business.
On the question of business expansion, only in the private sector would a company have the ability to borrow and to invest without the constraints of the public sector and, therefore, to create more jobs.

Government Business

Mr. Simon Hughes: To ask the Deputy Prime Minister what arrangements are in place for the co-ordination of Government business during the summer recess. [36748]

The Deputy Prime Minister (Mr. Michael Heseltine): The arrangements currently in place will continue to be operated throughout the summer recess.

Mr. Hughes: Well, that is a consolation. Is it not true that, a year after the Deputy Prime Minister's appointment as the co-ordinator of Government business, he has no more chance of co-ordinating business now than when he started? In fact, he cannot even co-ordinate Ministers to sing to the same tune. The Paymaster General has resigned over a disagreement with the Government on Europe. Is it not true that Government policy is still the same muddle and the same mess? The Government have at least four views on Europe: this year, next year, some time and never. It is a shambles.

The Deputy Prime Minister: It is refreshing to hear that there are four views in the Conservative party on this matter. My experience with the Liberal Democrats is that they have more than 20 views on every matter or policy—it depends on the time of day and the part of the country that one is in.

Mr. Wilkinson: As it is likely that the European Court of Justice will rule against the United Kingdom and require imposition of the working time directive during the summer recess, would it not be better for Her Majesty's Government to come to the House in advance of that with contingency plans by which we can maintain our social chapter opt-out in this sphere and not have it imposed on us?

The Deputy Prime Minister: I am grateful to my hon. Friend for giving me the chance to clarify the position. As he and the House will know, my right hon. Friend the Prime Minister secured an opt-out from the social chapter during the Maastricht negotiations. My right hon. Friend intends to make it absolutely clear to his colleagues in the European Union that that negotiation and deal must be


honoured. The fact is that my right hon. Friend will take up the matter during the intergovernmental conference, and that we are determined that it will be put right.

Mr. Skinner: In view of the fact that Ministers will not be answering questions during the parliamentary recess, does not that mean that, by and large, Ministers—including the Prime Minister—will be more available to meet people outside the House and to pick up money on the side? Therefore, according to the market-force philosophy, if Ministers are more available to meet the public and important business people—who are gaining patronage and power, and probably knighthoods and all the rest of it—does it not follow that their price should fall? What is the price of Ministers who resign? Would not it follow that a Minister who has just resigned from the Government should get a better price than a Deputy Prime Minister who is a failure?

The Deputy Prime Minister: The whole House will welcome the interest of the hon. Member for Bolsover (Mr. Skinner) in market economics. He has given me an opportunity to reflect on the fact that, fairly recently, to meet the leader of the Labour party, one had to pay £430 a head to go to the Savoy hotel. It has been suggested in some national newspapers that it is rather more expensive to meet my right hon. Friend the Prime Minister. but I think that the relative difference between the figures is a reflection of the quality of the two individuals.

Mr. Thurnham: Will the Deputy Prime Minister bear in mind the need to continue co-ordinating Government policies to help restore Manchester's bomb-damaged city centre, and, in particular, to cover the extra costs of policing to maintain the very necessary security cordon?

The Deputy Prime Minister: My hon. Friend shares the House's deep interest in the opportunity that, tragically, has now been presented to our great city of Manchester. I have given an assurance that, on behalf of the Government, I shall do all that I properly and reasonably can. The announcement that we are to hold an international competition to attract the most exciting designs for the rebuilding of Manchester has attracted widespread public support from all political sectors and from the entire community. I am delighted that I should have had some small part to play in that.

Mr. Prescott: Given the Deputy Prime Minister's extraordinary powers of presentation and co-ordination—which today enabled him to announce on television the resignation of a Minister before the Minister had even handed in his resignation to the Prime Minister—can the Mystic Meg of the Tory party tell the House whether anyone else will resign in the next 24 hours? Now that the Paymaster General has resigned, does not the Deputy Prime Minister agree with the right hon. and learned Member for Putney (Mr. Mellor) that that resignation shows that the Tory party is constitutionally unable to row together—in other words, that the Government are deeply divided and totally unfit to govern, and that it is time that they went?

The Deputy Prime Minister: It is quite quaint that the right hon. Gentleman should raise issues of membership of the Cabinet, the shadow Cabinet, the Government—

or whatever it may be—on the very eve of the point at which a prominent member of the Labour party is to be kicked off the shadow Cabinet because she had the effrontery to follow the precedent set by her own leader.

Dr. Spink: In view of the excellent news that we have heard today about funding for the millennium from business, will my right hon. Friend ensure that all good news—on jobs, on interest rates and on inflation—during the summer recess is disseminated effectively to the country?

The Deputy Prime Minister: My hon. Friend is right on both counts. The economy is now moving into one of the most exciting expansionary phases that any of us can remember, and that good news—in jobs and in other opportunities—will increasingly flow through into people's pockets.
As for the announcement that I was able to make today, I am sure that the whole House will welcome the fact that five major city institutions—Barclays, National Westminster, Midland, Lloyds and Abbey National—have today authorised me to say that they will be supporting the millennium festival at Greenwich. They are as determined as I am that there will be a clear statement in the festival about the pre-eminence of the City of London as a world financial centre in this and the next century.

Deregulation

Mr. Campbell-Savours: To ask the Deputy Prime Minister what assessment he has made of the effects of his policies of deregulation or industrial competitiveness. [36749]

Mr. Freeman: Our policies to push forward deregulation and promote competitiveness are set out in the 1996 competitiveness White Paper, published last month. The White Paper has been widely welcomed by business, including the Confederation of British Industry, the Engineering Employers Federation and the Institute of Directors.

Mr. Campbell-Savours: Is not the inevitable consequence of the failure properly to regulate the destruction of not only competitiveness but the product itself? Is not that the core message that comes through the row over bovine spongiform encephalopathy?

Mr. Freeman: If the hon. Gentleman will look back to previous Labour Governments before 1979, he will find that the proposals then for draft legislation would not have affected the development of BSE, because they were to do with preventing salmonella. Developments in the rendering industry in the 1980s came about from a decision by the industry itself, not a failure to regulate or deregulate. The hon. Gentleman cannot in any way ascribe the tragic increase in BSE, and now its solution, to a failure to regulate or deregulate.

Dr. Hampson: Does my right hon. Friend make the assessment that educational performance is basic to increasing competitiveness, and that we have a long way to go in the primary sector? May we count on the speedy and extensive expansion of the network of literacy and


numeracy centres, which is one of the best initiatives that the Government have launched but which is as yet relatively unsung?

Mr. Freeman: I agree. The skills audit, which was a parallel exercise to the competitiveness White Paper, was valuable and revealing. It shows how far this country has to go in not only primary and secondary education but higher and further education. I understand my hon. Friend's point and will certainly convey it to my right hon. Friend the Secretary of State for Education and Employment.

Policy Objectives

Mr. Miller: To ask the Deputy Prime Minister if he will make a statement on his monitoring of the effectiveness of the Government's policy objectives. [36750]

The Parliamentary Secretary, Office of Public Service (Mr. David Willetts): The Government aim at combining economic dynamism with constitutional stability and to continue—in stark contrast to the Labour party—our success in communicating those objectives.

Mr. Miller: In light of the Minister's answer, what impact will the resignation of the Paymaster General have on the Government's ability to achieve their objectives? Will that stability emerge as a result of that resignation, or will it take more resignations before stability emerges?

Mr. Willetts: The Government will carry on communicating their messages about economic success and continue protecting the British constitution from the Labour party's batty and damaging agenda.

Mr. Hawkins: Does my right hon. Friend agree that the Government's success in achieving their policy objectives was most recently emphasised by the huge inward investment in Wales announced in the last few days? Will we continue to see the successful implementation of Government economic policies, which could never have occurred if Labour's policies had been followed?

Mr. Willetts: My hon. Friend is right. More than 40 per cent. of all American and Japanese investment in Europe comes to this country, which is a vote of confidence in the Government's economic policies.

Competitiveness Unit

Mr. Touhig: To ask the Deputy Prime Minister what assessment he has made of the effectiveness of the competitiveness unit in his Department. [36751]

Mr. Willetts: As the recent competitiveness White Paper showed, we are doing well in world growth league tables, and our productivity is improving strongly. The best evidence of our success is our record of attracting inward investment—most recently, the Lucky Goldstar plans to invest £1.7 billion in manufacturing in Newport—the largest single inward investment ever in Europe.

Mr. Touhig: The OECD's latest employment study warned that low pay and the lack of a highly skilled

work force are combining to constrain our economic competitiveness. What are the Government doing about that?

Mr. Willetts: Our competitiveness White Paper shows that we have one of the lowest unemployment rates in Europe. In addition, within the Group of Seven we moved up from the fifth or sixth place on growth rates that we occupied in the sad days of the last Labour Government to third place in the 1980s. If the hon. Gentleman studies the White Paper, he will find the answer to his questions.

Mr. Nigel Evans: Does my hon. Friend agree that low pay is not the problem with Britain, but that no pay, through increased unemployment, would be the problem if we proceeded down the road to ruin with the social chapter, minimum wage and 48-hour directive that would be heaped upon us if the Labour party were elected to power?

Mr. Willetts: The pay of the average production line worker in this country compares very favourably with the pay that the equivalent worker would take home in Germany, France and Spain. The difference is that in Britain we have kept a grip on the extra costs imposed by Government, whereas in Germany, France and Spain, because of the social chapter, the extra costs imposed by Government are much higher. That is why Britain has lower unemployment.

Mr. Caborn: In view of what the Minister said about the OECD and the White Paper—which drew heavily on statistics from the OECD—does he agree with the OECD's statement that there is a link between our declining national competitiveness and the growth in wage inequality and job insecurity?

Mr. Willetts: I do not accept that there has been any decline in national competitiveness. The evidence assembled in successive competitiveness White Papers shows precisely that there has been a clear improvement in our position on growth per head compared with other advanced western countries. Of course, one in three of all those leaving school now go on to higher education, as against one in eight under the last Labour Government, which is significant evidence of how educational standards are improving.

European Union

Sir Teddy Taylor: To ask the Deputy Prime Minister what is his Department's role in the co-ordination of Government Departments in respect of publicising the impact of EU membership. [36752]

The Deputy Prime Minister: My right hon. and learned Friend the Foreign Secretary has overall responsibility for co-ordinating the Government's policy towards the European Union, including the presentation of that policy.

Sir Teddy Taylor: On the day of the tragic resignation of a very sincere and truthful Minister, will the Government consider whether, in the national interest—and bearing in mind the deep divides on Europe in both parties—it might be best to resolve the issue by letting


the people decide for themselves, through a referendum, which way they wish to proceed in Europe? Would not that be the best way of co-ordinating policy and accepting the simple fact that the country belongs to the people and not to the political parties?

The Deputy Prime Minister: If my hon. Friend is suggesting that there should be a referendum on whether the United Kingdom should leave the European Union, which is how I understood his question, the answer is that that would not be compatible with Government policy. It is clearly the Government's policy that, in the over-arching and overall interests of this country, it is fundamental that we be a leading member of the European Union.

Mr. Dalyell: What can the Government or the Community do to publicise the guidelines on airport safety and the safety of aircraft, which were formulated after Lockerbie—and which, incidentally, were eloquently outlined in The Sunday Telegraph—so that at least some of the basic principles are implemented, which has not been the case so far? That question is especially relevant in view of the dreadful events in Spain and on the TWA aircraft.

The Deputy Prime Minister: The hon. Gentleman raises the latest tragic event in civil aviation. As yet, we do not know the precise causes of that tragedy. I shall certainly draw the attention of my right hon. and learned Friend the Foreign Secretary to the hon. Gentleman's continuing concern in the context of the Lockerbie disaster.

Mr. Beith: How many Ministers are there left who share the view of the former Paymaster General about the Government's policy on a single currency? How many are there left who think that Britain's participation in the single currency is a genuine option? Are there enough of them to co-ordinate it?

The Deputy Prime Minister: The right hon. Gentleman has judged the Government's behaviour in the context of Liberal Democrat policy. The Government's White Paper has clearly set out our policy on the forthcoming intergovernmental conference. We have made wide-ranging statements on the fundamental issues relating to Europe. The Government's policy is perfectly clear. If a Minister cannot accept that policy, the honourable course is to resign.

Policy Objectives

Mr. Hanson: To ask the Deputy Prime Minister when he next plans to review the presentation of Government policy objectives as they relate to his responsibilities. [36753]

Mr. Willetts: We regularly review our presentation of Government policies—the presentation of successes such as rising living standards, higher educational standards and a fall in the crime rate.

Mr. Hanson: When the Minister next takes the opportunity to review the presentation of Government policies, will he rule out their presentation to groups of business men in return for £100,000 donations to the Conservative party?

Mr. Willetts: I would be interested to hear whether the Labour party will rule out giving trade unions a clear say in its policy in return for direct contributions to party funds. Labour is the party that is funded by outside interests.

Mr. Harry Greenway: Will my hon. Friend confirm that the Government's policy will be firmly to oppose the London Underground strike that is causing such misery to my constituents, the rest of the people of London and the economy? Has my hon. Friend noted that the Leader of the Opposition has made a feeble attempt to oppose the strike, and that the deputy Leader is said to have been so annoyed that he had to be scraped off the wall?

Mr. Willetts: My hon. Friend is quite right: we unreservedly condemn both the tube strike and the Post Office mail strike. The Labour party could do with rather better co-ordination on the matter.

Mr. Pike: Do the Minister and the Government continue to review the effect of the abolition of the wages councils, and the increased poverty and low pay that many people in Lancashire have had to suffer as a result of that policy?

Mr. Willetts: I am sure that the abolition of the wages councils is one of the many reasons why this country enjoys a much lower unemployment rate than countries on the Continent. If people are in low-paid jobs, it is much better to help them out with family credit than to introduce a minimum wage and ensure that they have no jobs at all.

Deregulation

Mr. John Marshall: To ask the Deputy Prime Minister what amount of time he spent on promoting the policy of deregulation in the last month. [36547]

The Deputy Prime Minister: Promoting the need for fewer, better and simpler regulations is a constant theme of my daily work.

Mr. Marshall: What a wonderful tune.
Does my right hon. Friend agree that the threat to jobs in the United Kingdom comes from the deregulated economies of south-east Asia? Does he agree that those tiger economies have prospered while jobs have disappeared in the regulated economies of western Europe? Does not the threat to jobs come from increased regulation in the form of, for instance, the social chapter and a national minimum wage—the new dangers from new Labour?

The Deputy Prime Minister: I entirely agree. Moreover, the privatisation programme that we have introduced has undoubtedly contributed to a great surge in productivity in British industry, with all the growth implications that that has. All the steps that we have taken to make ours one of the fastest-growing economies in western Europe, with the highest proportion of the work force employed, should be seen in the context of the Labour party's opposition to all of them.

Mr. Olner: While the Deputy Prime Minister is contemplating that, will he not tell the truth—that more regulatory legislation has been introduced under the present Government than any deregulatory legislation that he has ever introduced? Surely the truth is that there is now more regulation governing small business people than there was before.

The Deputy Prime Minister: It is possible to discuss such matters in sensationalised headline terms, and to give an entirely false impression of what has happened. If people recognise that, in order to complete the single market, we have had to harmonise and regulate 400 elements of an agenda that was designed to create the greatest expansion of trade opportunities that the country has ever seen, they will realise that it is often necessary to regulate to create a freer climate and a more harmonious background. If they also take into account the fact that most regulations that pass through the House have nothing to do with small businesses, and are often nothing more than measures to update or uprate existing regulations, they will realise that newspaper headlines can be constructed based on the flimsiest straw.

Competitiveness

Mrs. Anne Campbell: To ask the Deputy Prime Minister what plans he has to improve competitiveness through increasing the availability and accessibility of information technology. [36755]

Mr. Willetts: The Government's plans are set out in the recently published competitiveness White Paper and include the DTI's information society initiative, which is providing £35 million of new money to help firms capitalise on new technology, and the recent announcement by my right hon. Friend the Chancellor of the Duchy of Lancaster that a Green Paper will be published in the autumn on the Government's plans for information technology.

Mrs. Campbell: When the Deputy Prime Minister finally launches his "IT for All" strategy, perhaps he will remember that he pinched his best ideas from the city and county councils in Cambridge which, as a result of a successful public-private partnership, provide free Internet access through public libraries, council offices and citizens advice bureaux

Mr. Willetts: I welcome what is going on in Cambridge, which shows what can be done to spread information technology. Part of the secret of Cambridge's success—including, for example, the Cambridge interactive television trial—has everything to do with the favourable environment that the Government have created for cable television, which is threatened by the Labour party's proposed sweetheart deal with BT.

Mr. Jessel: Is information technology available and accessible in the Treasury? Can my hon. Friend comment on the position in the Treasury of Miss Helen Goodman, who at first denied and later admitted that she was seeking to become a Labour parliamentary candidate, showing that nothing that she has said can be believed, including her denial of knowing anything of the leaked documents that she had helped to prepare?

Mr. Willetts: That is a matter for internal Treasury management, which is considering the position.

Oral Answers to Questions —  OVERSEAS DEVELOPMENT

Sudan

Mr. Hunter: To ask the Secretary of State for Foreign and Commonwealth Affairs how much (a) bilateral and (b) multilateral assistance the Government (i) gave to Sudan in 1995–96 and (ii) plans to give to Sudan in 1996–97. [36801]

The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): While we have given no aid to the Government of Sudan since 1991, last year—1995–96—we spent an estimated £6 million bilaterally and in 1995 committed more than £2 million through multilateral agencies, including the European Union, on the emergency and short-term rehabilitation needs of the Sudanese people. We are ready to address such needs again this year as they arise.

Mr. Hunter: In the light of the linkage, which the Government sometimes stress, between overseas aid and civil liberty and human rights, will my right hon. Friend make an assessment of the situation in that respect in Sudan? To what extent is it influencing the Government's overseas aid programme there?

Mr. Hanley: As I said, the human rights situation in Sudan is extremely serious, but we do not give aid to the Sudanese Government. We are very concerned about human rights in Sudan. It was again condemned at the recent United Nations Commission on Human Rights. Allegations of slavery and genocide have, of course, attracted serious attention. We are also concerned about policies to prevent freedom of speech and the pursuit of Islamisation by force, which are equally unacceptable. The economic situation is dire, and life for ordinary Sudanese people is extremely hard.

General Agreement on Tariffs and Trade

Mr. Corbyn: To ask the Secretary of State for Foreign and Commonwealth Affairs what studies his Department has (a) commissioned and (b) evaluated on the effects of the GATT on agriculture in the poorest countries. [36782]

Mr. Hanley: In 1994, the Overseas Development Administration commissioned from the Overseas Development Institute a study on the impact of the GATT Uruguay round agreement on developing countries, including studying the effect on agriculture.

Mr. Corbyn: Would the Minister care to look carefully through the studies that his Department has produced and those conducted by Oxfam? Does he not recognise that, since the GATT agreement, there has been an increase in the export of cereals and other products from the EU and north America, heavily subsidised by taxpayers and often causing enormous ecological damage in both those areas, while farmers in third-world countries who do not enjoy such governmental support are being forced to compete with products whose prices they simply cannot match, and are therefore being pushed out of business? Is that not an


example of GATT working in the interests of the richest producers in the richest countries, to the detriment of the poorest farmers in the poorest parts of the world?

Mr. Hanley: I believe that lowering trade barriers, making more efficient use of resources and protecting the environment go hand in hand. The best way to tackle major environmental problems is through multilateral agreements, not unilateral trade actions. The World Trade Organisation is considering whether any further clarification of that is needed in international trade rules, although internationally agreed safeguards are in place to help to deal with the problems to which the hon. Gentleman has referred. The decisions commit us to examine the impact of agricultural settlements on countries that are net importers of food and to take appropriate action.

Mr. Wilkinson: Do not countless impartial studies demonstrate that the common agricultural policy of the European Union is extremely inimical to the interests of primary agricultural producing countries overseas and is a mechanism for their impoverishment? Would it not be a better use of taxpayers' money for Her Majesty's Government to announce to their partners at the intergovernmental conference that they intend not just to reform the CAP but to start its dismantlement by withdrawing?

Mr. Hanley: Although I agree with my hon. Friend that a reform of the CAP is necessary, I feel that the United Kingdom's membership of the EU helps to influence the Union, and I believe that our share of the EU's aid policy and our influence in it are desirable for poorer countries.

Miss Lestor: Does the Minister agree that there must be coherence between our aid and trade policies, including GATT? Bearing in mind the recent visit of Nelson Mandela, his tribute to those British people who campaigned for his release and the Prime Minister's promise to support South Africa in its trade negotiations with the EU, what proposals do the Government have to ensure that development objectives are high on the negotiating agenda, and that a realistic long-term timetable for reform—covering at least 10 years, as has been requested—is introduced? Will he ensure that all sectors of the South African economy are considered—particularly the health, housing and education, sectors in which there is urgent need for investment?

Mr. Hanley: On behalf of the Government, I thank the hon. Lady for her years of service on the Opposition Front Bench. I thank her also for her constant courtesy and for her great dedication to the cause that we are discussing. She will be sadly missed. This may, of course, be my last time at the Dispatch Box also. We have yet to see.

Mr. Prescott: Oh!

Mr. Hanley: One never knows, John.
As to the main matter, the hon. Member for Eccles (Miss Lester) is quite right, and we must seriously consider these matters. The Overseas Development Institute's recent report on the effect of the Uruguay round on developing countries and agriculture discovered that exports from the Association of South-East Asian Nations

countries and India were expected to gain from the reduction in tariffs in OECD and other developing countries. But African, Caribbean and Pacific countries—the least-developed countries—may lose the equivalent of approximately 2 per cent. of export earnings in the short term, due to increased crude import prices and the loss of marginal preference to other LDCs for certain goods. We are looking at the report, and we will certainly consider what she said, as it is extremely important.

Third World (Development Projects)

Mr. Spearing: To ask the Secretary of State for Foreign and Commonwealth Affairs what consultations he has had with the United Kingdom representatives on the board of the World bank concerning its policies for financing development projects in the third world. [36783]

Mr. Hanley: My right hon. and noble Friend the Minister for Overseas Development, who is also the UK alternate governor for the World bank, and her officials have frequent consultations with the United Kingdom executive director and his office.

Mr. Spearing: Does the Minister recall that, four weeks ago today, I inquired about the policies of the International Monetary Fund in respect of comparable investments? He kindly said that he would make inquiries, particularly with regard to the prejudicial effect of any of the IMF's conditions on Rwanda and former Yugoslavia that may lead to a stoking up of strife in those areas. If such allegations by the debt crisis network have any substance, will representations be made not only to our representative on the IMF, but to the World Bank on comparable activities in that organisation?

Mr. Hanley: I am grateful to the hon. Gentleman for sending me the two appendices to which we referred the last time we discussed the issue. I read them and I have replied to him in a letter which he may by now have received. I have put a copy, as I pledged, in the Library. The G7 summit in Lyon at the end of June was a further step in the process of reaching agreement on the multilateral debt initiative. A copy of the communiqué has also been placed in the Library. We hope that final agreement can be reached at the World bank-International Monetary Fund meeting in October. We are working hard with our partners to that end. The British Government have written off the aid debts of 31 of the world's poorest countries, with a value of more than £1.2 billion. All our aid is now on grant terms. We are taking the lead in pressing for solutions to the debt burden of the poorest countries.

Sir John Stanley: Is my right hon. Friend aware of the World bank's valuable initiative to make a line of $200 million available for micro-loans to be targeted on the poorest of the world's poor? Given the critical importance to the very poorest of access to credit, will he give serious positive consideration to launching a similar initiative in the context of the British Government's bilateral aid programme?

Mr. Hanley: Again, my right hon. Friend is right. I am delighted that the World bank has offered $500 million from its net income this year as its contribution to the multilateral debt initiative, with the prospect of


substantially more in succeeding years. The IMF and the World bank have identified some eight to 20 countries as candidates for the initiative, which applies only to highly indebted, poor countries that have demonstrated commitment to economic reform.

Burundi

Mr. Ainger: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his Department's involvement in aid projects in Burundi. [36785]

Mr. Hanley: Britain has committed nearly £8 million in humanitarian assistance to Burundi since October 1993, including £2.9 million through our share of European Union contributions. We are ready to provide further assistance as needs arise.

Mr. Ainger: Does the Minister accept that a lot more may be needed in Burundi if we are to prevent a repetition of the tragedy of Rwanda? Has he seen the recent comments of Julius Nyerere, the former President of Tanzania, following his investigation in Burundi to try to find a resolution? Does he accept that Julius Nyerere suggests that the EU and the United Nations should become significantly involved in the internal affairs of Burundi and that otherwise the slaughter of 500,000 people that happened in Rwanda is likely to be repeated?

Mr. Hanley: The hon. Gentleman is right to be deeply concerned about the recent deterioration in the political and security situation in Burundi. We read only this morning in the newspapers of the massacre of 300 Tutsis and of expulsions. It is a difficult and distressing situation. We condemn politically motivated violence, from whatever quarter. The solution to the problems requires the commitment of Burundi's leaders and the involvement of the international community, as he said.
We continue to work closely with the UN Secretary-General and his special representatives in the region and we strongly support the international efforts at preventive diplomacy, led by ex-President Nyerere. We contribute to the costs of his mission. My right hon. and learned Friend the Foreign Secretary of State and my right hon. and noble Friend the Minister for Overseas Development met Julius Nyerere in London on 2 May to discuss ways forward. He recognises the immensity of his task and that durable solutions will require the agreement of the parties in Burundi.

Madam Speaker: That was a long answer—almost a statement.

Miss Emma Nicholson: Does the Minister agree that the World Service was particularly important in the transmission of accurate information during the tragedy in Rwanda? Would he confirm, as he has not yet done, despite two questions being asked, that the funding for that World Service network came largely from the voluntary organisations? Does he agree that the World Service needs to be supported and enhanced if it is to assist in tragedies such as that in Burundi?

Madam Speaker: Order. It is about time the hon. Lady came to the substantive question on the Order Paper.
If the Minister wishes to answer, I think that the hon. Lady was referring to the World Service as it is received in Burundi. Is that correct?

Miss Nicholson: Yes.

Mr. Hanley: I am pleased to be able to say that the World Service will continue to be received throughout the world. Its efficacy in Africa is without question. The World Service carries an extremely important role in Burundi and further afield, and the Government support it—to the tune of more than 50 per cent. in real terms since we came to power in 1979.

Overseas Aid (Distribution Criteria)

Mr. William O'Brien: To ask the Secretary of State for Foreign and Commonwealth Affairs what changes have occurred in the criteria governing the distribution of overseas aid in the last year; and if he will make a statement. [36786]

Mr. Hanley: There have been no changes in the criteria governing the allocation of bilateral aid; those remain the same as in my answer of 25 March, Official Report, 25 March 1996; Vol. 274, c. 416. They are the needs of the country concerned and the effectiveness with which aid can be used. A number of other factors, including good government, the commitment of recipients to political and economic reform and traditional ties with Britain, are also taken into account. There are also our obligations to the multilateral organisations of which we are a member.

Mr. O'Brien: I appreciate the Minister's response. Agencies and people in receiving countries are concerned that the Government appear to be making changes, for example in some of the approaches being made to help countries in need. When agencies have worries, will the Minister try to erase any concerns that they express?

Mr. Hanley: I am grateful to the hon. Gentleman for the way in which he put his question. Obviously, aid cannot be ossified—either the level of aid or the recipients at any one time. One has to look to the needs of countries as they change. We maintain a substantial aid budget. It was more than £2 billion in 1996–97 and we were the sixth largest donor in the 1995 calendar year. We concentrate on the poorest countries, particularly those in Africa and Asia. They need aid, and it is therefore crucial that our bilateral programme concentrates on them.

Oral Answers to Questions — PUBLIC ACCOUNTS COMMISSION

Statisticians

Mr. Steen: To ask the Chairman of the Public Accounts Commission how many statisticians were employed by the National Audit Office in each of the past three years. [36761]

Sir Peter Hordern (Chairman of the Public Accounts Commission): The number of staff with degrees in mathematics and statistics in the National Audit Office at end of June was 28 in 1994 and 30 in


1995 and 1996. Full-time professional statisticians or operational researchers in post at the end of June numbered six in 1994, eight in 1995 and 11 in 1996.

Mr. Steen: That shows that the National Audit Office, which does a splendid job, is increasing its staff and the number of people on the public payroll. Will my right hon. Friend consider the possibility of the Audit Commission charging the people it audits sufficient money so that it can become self-financing? [HON. MEMBERS: "National Audit Office."] I understand that point. Or, it could contract out to the private sector, so that it does not need an increased number of civil servants. The problem is that it is constantly increasing its bureaucracy and costing the taxpayer more.

Sir Peter Hordern: What has happened is that the National Audit Office is employing many more professional people. That does not mean that the overall number of people employed there is increasing. The work of the National Audit Office is certainly increasing—not least because of the number of inquiries from hon. Members—and that is wholly to be welcomed. Hon. Members are much more interested in the activities of the National Audit Office, which explains the small increase in the estimates for the next two years. The House may be interested to know that the report of the commission into the activities of the National Audit Office will be available this week.

Mrs. Anne Campbell: Is not money spent on statisticians a good investment? Will the right hon. Gentleman also consider the example of the 1980s, when the Government reduced the number of statisticians, which led to Chancellor Lawson making some disastrous economic decisions from which we are probably still suffering?

Sir Peter Hordern: I do not know that the National Audit Office goes in much for economic decisions. Perhaps it is just as well that it does not. All that I can say is that, the more professional the National Audit Office is, the better it will be for the taxpayer and for the House.

Oral Answers to Questions — OVERSEAS DEVELOPMENT ADMINISTRATION

Know-how Fund

Mr. John Marshall: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the impact of the know-how fund.[36787]

Mr. Hanley: The know-how fund is making a substantial contribution to economic and political reform. There are many examples of its successful impact in the annual report for 1995–96, which was published on 15 July. A copy has been placed in the Library of the House.

Mr. Marshall: I thank my right hon. Friend for that answer and for emphasising the success of the know-how fund. Does he agree that our improving relations with the emerging democracies of central Europe will be fully strengthened only when those countries become members of the European Union and contribute to that body?

Mr. Hanley: Certainly enlargement is part of our ambition for them.

Mr. Dalyell: What help is being given to deal with the problems of the crumbling sarcophagus at Chernobyl?

Mr. Hanley: I am sorry; could the hon. Gentleman repeat the question? I did not hear it properly.

Mr. Dalyell: What help is being given to deal with the crumbling sarcophagus at Chernobyl, which is creating a real nuclear danger?

Mr. Hanley: I am grateful to the hon. Gentleman for repeating his question. I do not know the detail about the matter. I shall have to find out from my hon. Friend the Minister of State, Foreign and Commonwealth Office, the hon. Member for Upminster (Sir N. Bonsor), who has responsibility for Ukraine. I shall write to the hon. Gentleman and let him have the answer.

Oral Answers to Questions — CHURCH COMMISSIONERS

Religious Education

Mr. Harry Greenway: To ask the right hon. Member for Selby, representing the Church Commissioners, how many clergy on the commission's payroll are currently estimated to undertake the conduct of acts of worship or the teaching of religious education in schools; and if he will make a statement. [36756]

Mr. Michael Alison (Second Church Estates Commissioner, representing the Church Commissioners): This is not a matter for the commissioners. They are not directly responsible in this area, and I am afraid that we do not have access to the relevant statistics, but I understand that the number is considerable.

Mr. Greenway: If a considerable number of clergy already teach in schools, could not more do so? Perhaps the Dean of Lincoln and his associates would be better employed in doing that. Is it not important that the teaching of right and wrong should come first in the Church's priorities and that clergy and bishops should take more of an interest in their schools than they do?

Mr. Alison: I sympathise with what my hon. Friend says, but as he will know, because he is an ex-headmaster, that, for clergy to take part in school assemblies, they have to be invited by the headmaster. If they are likely to be competent and helpful, they will be invited. I am glad to tell my hon. Friend that many dioceses, including Lincoln, run in-service courses as part of their programme of continuing ministerial education so that local clergy are fit to take school assemblies—no mean undertaking, as my hon. Friend knows.

Mr. Spearing: Does the right hon. Gentleman agree that, whatever the merits of ordained persons conducting services of worship in schools—clearly, denominational schools—that category of person would be regarded by many pupils as having a vested interest? Does he further agree that it is highly desirable that most religious


education be conducted by lay persons? Does he also agree that religion cannot be taught—it is something for consideration by the person concerned?

Mr. Alison: I entirely accept the point that the hon. Gentleman makes. Religious education is not an occasion for proselytisation. The participation of lay contributors to RE is of fundamental importance. Many lay parents of children in schools are drawn into RE and school worship to assist precisely in that way.

Ethical Investment

Mr. Tony Banks: To ask the right hon. Member for Selby, representing the Church Commissioners, what policies are followed by the commissioners in respect of ethical investment. [36757]

Mr. Alison: It is the commissioners' policy not to invest in any company of which the main business is in armaments, gambling, breweries and distilleries, tobacco or newspapers. I am arranging for a leaflet setting out our ethical policy to be sent to the hon. Gentleman.

Mr. Banks: That is very interesting. Does that mean that the 30 per cent. rule still applies, whereby the commissioners are prepared to invest in companies that have only 30 per cent. of their production in arms or some of the other areas that he has just listed? If that is so, does it mean that, provided that we behave ourselves for 70 per cent. of the time, the other 30 per cent. we can have a bit of slap and tickle?
While I have the right hon. Gentleman there, and as I have been such a strong supporter of the Church Commissioners over the years, is there any chance of his making sure that they offer up a few prayers for me for the shadow Cabinet elections? I suspect that I am going to need some divine intervention this year.

Mr. Alison: I think that the rules guiding us on ethical investment would deter us from offering any prayers concerning the shadow Cabinet elections. As for the 30 per cent. figure, the hon. Gentleman is a little wide of the mark. If a company's investment in armaments is as high as 30 per cent., the Church Commissioners are uneasy about investing in it. That is why we are in continual dialogue with GEC about the level of its armaments production.
I ask the hon. Gentleman, before he becomes holier than thou, which I know is not characteristic of him, to remember that many of those companies pay substantial taxation to the Chancellor. He and I should be very careful, when our next salary cheque comes along at the end of July—it will probably be slightly bigger than

previously—to ensure that it is ethically acceptable, because some of it may come from those companies about which the Church Commissioners have scruples.

Mr. John Marshall: Why do the Church Commissioners consider that it is immoral to invest in the Daily Mail?

Mr. Alison: The rule about not investing in newspapers exists purely so that the Church Commissioners do not take sides in the political involvement or the political sympathies of any newspaper. By dint of not investing in newspapers, we do not invest in The Times, The Daily Telegraph, The Guardian, The Independent or any others whose politics are different and about whom there might be conflict in Church circles as to the investment made.

Properties and Land

Mr. Flynn: To ask the right hon. Member for Selby, representing the Church Commissioners, what new proposals he has to increase the revenue from properties and land held by the Church Commissioners. [36758]

Mr. Alison: The commissioners seek to invest in quality properties which will secure a reliable and growing flow of income, attracting commercial and agricultural tenants whose businesses appear sound and likely to prosper.
The commissioners' property portfolio achieved a total return of 19.5 per cent. in 1995, which compared very favourably with industry benchmarks.

Mr. Flynn: I make a similar plea to the one made by my hon. Friend the Member for Newham, North-West (Mr. Banks), because my case in the shadow Cabinet election is even more deserving.
How much of the £228 million increase in the value of the Church Commissioners' portfolio in agricultural land arose from the fact that they allow blood sports on their land? Why do they allow the pursuit of defenceless animals for fun? Do they believe that Christian charity should be limited to one species only?

Mr. Alison: The hon. Gentleman must have a very high view of the value of foxes and of the number of foxes that there might be on the land, to work out that that could have a significant effect on the property values of our agricultural holdings. We leave it, and have always left it, by tradition, to the personal views of our tenants as to whether they ban hunting or shooting on their land or whether they regard it as acceptable; but all the blood sports must be conducted within the statutory framework of accepted standards for cruelty to animals.

Postal Services

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): I want to make a statement on the disruption of the postal services nationally as a result of recent and planned future industrial action by employees of the Royal Mail. First, Madam Speaker, I apologise to you and to the House for the fact that news of the Government's intentions was inadvertently disclosed in another place last Thursday.
In the past four weeks there have been three 24-hour national postal strikes, which have caused significant inconvenience and disruption to businesses and to the public throughout the country. In the Government's view, it is unacceptable that the country should be faced with the threat of a series of further strikes in the coming weeks. These strikes are unnecessary and damaging. They harm the industry and the work force, but the real and immediate victims are the customers; and the Government can no longer stand aside.
In the light of the Communication Workers Union announcement on 11 July that the strikes in late June were to be followed by a series of four further strikes, the first of which took place last Thursday, consultations were initiated with the Post Office on 12 July about the implications of a suspension of the statutory monopoly on the delivery of letters for less than £1. I am now consulting the Post Office on a specific proposal to suspend its monopoly for an initial period of one month with effect from 26 July, unless before then the CWU calls off its strike action. If it becomes clear that disruption of the postal services is likely to continue beyond that currently announced, I would propose a further suspension of the monopoly for three months.
The resolution of this dispute is a matter for the Post Office and the union, and I am pleased that they are now talking to the Advisory, Conciliation and Arbitration Service. In these circumstances, it is wholly inappropriate that the planned series of strikes should continue. The Government are concerned to protect the public interest, which is why we now contemplate the suspension of the Post Office's monopoly. If that happens, it will be solely because the union persists with these damaging strikes—strikes which are wrong for consumers, wrong for the economy, and above all wrong for the postal workers themselves. I invite the whole House to condemn the strikes.

Mrs. Margaret Beckett: Is the Secretary of State aware that most customers will see straight through this piece of transparent dishonesty and will recognise that the Government are trying, yet again, to pursue the folly of Post Office privatisation by any means or on any excuse—despite the fact that it is so unpopular with the public that only 60 out of 16,000 supported the Government's proposals on the last occasion?
The Secretary of State has tried to imply that this action has been forced on him by the announcement of the continuing dispute; but had not the CWU already made public a reduction in its planned action from a 36 to a 24-hour stoppage, and an agreement with the employers to seek conciliation at ACAS, before the Secretary of State made his announcement? He says that he is pleased

that the union is now talking to ACAS. Is it not true that it was talking to ACAS before the right hon. Gentleman made his announcement?
Did the Secretary of State rush to make the announcement because he was afraid that the dispute might be settled before he had a chance to use it as an excuse? Is it true that the union and the employer had been with the conciliator for only one hour before the Secretary of State made his intervention?
Does not the pattern of this announcement reveal the right hon. Gentleman's real agenda? He apologised to the House for the inadvertent disclosure of an answer in another place. Will he admit that he told this House that he intended to consult on whether to lift the monopoly; whereas within less than 24 hours, in an answer in another place, he revealed that he was consulting on whether to lift the monopoly on 26 July for one month, with an option on a further period of three months? That made it quite clear that the decision had already been made.
Does not the right hon. Gentleman have a statutory obligation to consult the Post Office; and is not that the only reason why he announced consultation rather than action? Did he in fact consult the Post Office in advance? Is he aware that the Post Office is saying that it is not appropriate for this action to be taken unless there is a continuation of the dispute?
Does the Secretary of State acknowledge that the Post Office is saying that this is not the course of action to take, because lifting its monopoly threatens the universal service at a uniform price, threatens the Royal Mail as we know it, and hence threatens post offices as we know them, with all that that implies for the rural community?

Mr. Lang: I suppose that represents progress of a sort. When I opened my Sunday newspapers I discovered that the right hon. Member for Derby, South (Mrs. Beckett) was saying on this matter:
I have nothing whatsoever to say".
In this, she was at odds with the hon. Member for Sheffield, Brightside (Mr. Blunkett), a member of Unison, who called for the Underground strike to go to binding arbitration. His colleague as employment spokesman, the hon. Member for Oldham, West (Mr. Meacher)—ironically also a member of Unison—contradicted him by saying that there was no question of forcing arbitration on the unions. Meanwhile, the deputy leader of the Labour party was said to be being scraped off the wall. When he denied that, we had to settle for the idea that he was throwing the teacups around. The rest of the shadow Cabinet coyly claimed suddenly to be bound by collective responsibility.
The fact is that we have heard a great sponsored silence on industrial disputes from the Labour party, and the right hon. Lady today has done nothing to change that situation. We listened to hear her condemn the strikes, but not a word of condemnation passed her lips. She referred to transparent dishonesty. I must ask the House: where is the honesty in a party which pretends to be new Labour, with new policies and friends with everyone, yet which fails to condemn strikes that damage the public interest?
The right hon. Lady referred to privatisation, which has nothing to do with this industrial dispute, and she talked about a reduction in support for the strike. The number of workers who are defying their union and going back to work has doubled since the first strike in June.
I welcome the fact—and I welcomed it last weekend—that the unions and the Post Office are both talking to ACAS. There is no question of a decision already having been made, as the right hon. Lady suggests. I have made it clear in all correspondence and statements that our final decision depends on the conclusion of consultations with the Post Office, which are taking place at present, on the specific proposal of lifting the monopoly for one month from 26 July if the strikes go ahead.
I will consider the Post Office view when I receive it, but it is time that the House came together to condemn strikes in public services of this type. We heard not a word of condemnation from the Labour party—not a word of sympathy or understanding for the disruption to the public interest, to business and to members of the public. Is the Labour party indifferent, or is it in the grip of its trade union bosses? People outside will see the new dangers attaching to new Labour.

Mr. Tam Dalyell: On a point of order, Madam Speaker.

Madam Speaker: Points of order are taken at the end of statements.

Mr. Nigel Waterson: Can my right hon. Friend confirm that the issue at the centre of this dispute is the management's attempt to introduce team working both to improve productivity and to devolve decision-making and responsibility to individual workers? Does not that fact show how luddite the unions still are in their attitude to industrial relations?

Mr. Lang: My hon. Friend is right. Substantial improvements in productivity could be made in the postal services, and the Post Office is seeking to introduce them. It has made good progress in the negotiations, which is another reason for condemning the movement of the unions to strikes. My hon. Friend is right to identify streaming and team working as the two issues that most concern the negotiations at present.

Mr. Nick Harvey: Does the Minister recognise that the Post Office and its workers have achieved record productivity and profits already, and that one of the root causes of the strike is the fact that the Government have decided to take away twice the profits that they had been going to take away through the external financing limit? Should not so important an issue as the Post Office monopoly be reviewed in a strategic and long-term way, rather than in this tactical way? Does he think that the private sector will be capable of responding on such a short-term basis when it does not have the infrastructure to do so? Is not the true motive for the Government intervention in a strike, after years of saying that that was not the role of Government, a combination of pique that they were unable to get privatisation through the House and pre-electioneering tactics?

Mr. Lang: The hon. Gentleman is talking utter nonsense. Last year, profits fell by £50 million. That underlines the fact that the Post Office must continue to build on the improved productivity that has already been

achieved and to which I have paid tribute. Substantial further productivity gain is to be had, not least as a result of the KPMG report. The Post Office is right to press for the modernisation of working conditions, and the union is not doing itself or the public any service by abusing the Post Office's monopoly.

Mr. Peter Brooke: Will my right hon. Friend comment on the rumours that the difficulties in the negotiations originated in Glasgow and Liverpool, cities not notable for Conservative representation?

Mr. Lang: My right hon. Friend is ahead of me with his information. I have not heard that the difficulties were confined to that, but the union's writ runs across the country and, as I have said, support for the strike among union members has diminished substantially since the first strike.

Mr. George Foulkes: Does the Secretary of State agree that the rural areas that he and I represent will suffer most by the lifting of the monopoly? How can he face his electorate at the next election when he represents a constituency where the universal provision at a uniform rate is the only way of ensuring an efficient service in our rural areas?

Mr. Lang: No one is contemplating the abandonment of the universal service obligation, but how can the hon. Gentleman face his constituents when he supports a strike that denies the collection or delivery of postal services not just in rural areas such as his, but throughout the country?

Mr. Anthony Coombs: I warmly welcome the Government's action to protect mail users and the ultimate viability of the Post Office. Does my right hon. Friend agree that it is typical of the craven cowardice of the Labour party that it refuses to protect mail users by condemning the strike? Does he also agree that it is now time for the Government to consider lifting the monopoly on mail services so that they can compete properly with overseas interests in providing a service for the 21st century?

Mr. Lang: My hon. Friend raises a broader issue that can be considered only in the long term. It is important to maintain the universal service obligation at a standard price, which is central to the continuing delivery of mail. Those issues would have to be considered against that obligation. In the meantime, it is important that these unnecessary industrial disputes, which have recourse far too easily to strike action, are condemned by hon. Members on both sides of the House.

Miss Kate Hoey: Does the Secretary of State agree that it is an empty gesture to threaten to lift the monopoly? Does he realise the repercussions that that would have, particularly on rural areas? Does he not know that the dispute is almost settled? There is agreement on pay and working conditions, and only a minor amount remains to be agreed. He should not stand there posturing but should sit back and hope that the dispute will be settled. He should not interfere with genuine negotiations that are going on at this moment at ACAS.

Mr. Lang: I hope that the hon. Lady is right and that the dispute is almost over. If that is so, why does she not join me in asking the unions to call off their damaging series of strikes?

Mr. James Couchman: Does my right hon. Friend agree that this unnecessary strike, which appears to have much to do with a power struggle within the union, will lead to a loss of business, through the use of faxes, E-mail and other modern technologies, which may never be recovered?

Mr. Lang: My hon. Friend is right. As I said in my statement, the union is damaging the interests of its own work force. Since the last postal strike, there has been a substantial development of E-mail, fax machines and other means of communication. Every time that there is a serious dispute in the postal service, the Post Office loses substantial business, some of which never returns.

Mr. Tam Dalyell: Will the President of the Board of Trade answer the factual point put by my right hon. Friend the Member for Derby, South (Mrs. Beckett)? Is it true that the unions had been at ACAS for only an hour when he made the announcement from the Front Bench?

Mr. Lang: I understand that the first ACAS involvement was on 17 July—last Wednesday—and the second was last Friday. The unions and the Post Office are speaking separately to ACAS this afternoon.

Mr. Robert G. Hughes: In making this welcome statement, is not my right hon. Friend being a little unfair on the right hon. Member for Derby, South (Mrs. Beckett)? How can she be expected to take the side of business and the people of this country when later this week she will need the votes of all the trade union-paid poodles to elect her back to the shadow Cabinet?

Mr. Lang: That may be why the Labour party is being so coy about this matter. But the public have a right to know the Opposition's policy on industrial relations. If the spectre of the car park meeting, secondary picketing, secondary strikes, flying pickets and closed shops is to be resurrected, the electorate should know about it, and the sooner the better.

Mr. David Winnick: Does the Secretary of State recognise that his statement will be regarded, and rightly so, as an act of sheer spite against the unions? He clearly took every opportunity to put the employer's side. Some Conservatives—the Secretary of State may be one—would like to see strikes in the public sector banned. Is it not a fundamental right in a democracy to tell one's employer that one does not want to go into work and that one has a right to strike? That is the point that we used to make against dictatorships. What about that right in Britain?

Mr. Lang: I am not taking the employer's point of view. I am not taking a side in this dispute. I am simply taking the side of the public interest, and it is time that those who operate a monopoly service recognised that they must take seriously their obligation to the public.

Mr. Douglas French: Is my right hon. Friend aware that his proposed suspension of the postal monopoly will be a welcome relief to the businesses that rely on the postal service to keep them in business—that is, for the receipt of orders and the execution of orders? His swift action to bring the matter to a head will be welcomed.

Mr. Lang: No one would pretend that the suspension of the monopoly will ensure that the service will continue in the way that the Post Office has operated it—this will be a second-best solution. However, if it enables at least some mail to get through, it will be better than nothing at all.

Mr. Dennis Skinner: Does the Secretary of State appreciate that this is a dispute, leading to a strike, in which the members of the union have a powerful case? Is he aware that they are trying to get rid of Saturday working? The Secretary of State, as a Member of Parliament, has voted in the House for Members to have a four-day week, to have Friday off, for 10 weeks a year. In this day and age, surely the people who deliver the mail have the right to a five-day week. I believe that they have a powerful case. Will the Secretary of State bear in mind the fact that a ballot was decided by Conservative Members of Parliament in debates in the House? It is a moderate union, putting a moderate case. We are beginning to see the real face of the Tory Government—Hitler and Mussolini banned strikes, which is what the Government would like to do.

Mr. Lang: The hon. Gentleman has got his facts wrong. The strike is not about Saturday working—it is about team working as an improved mechanism for sorting mail in the post offices, and about how much first-class mail should be delivered in the first delivery and how much should be delivered in the second delivery. These issues could easily be resolved by negotiation and good will on both sides, without the need to damage the public interest.

Sir Michael Shersby: Is my right hon. Friend aware that many people in this country will regret the decision of the Post Office workers to take industrial action? Does he agree that today's decision may turn out to be an historic one? Perhaps it is time that this country addressed the question whether essential workers in the Post Office, on the tubes and in other areas should have the right to strike, or whether it might be better to replace this outmoded and outdated weapon by a negotiating board and arbitration.

Mr. Lang: I hear what my hon. Friend is saying, and he has expressed a point of view that is held in some quarters. The armed services, the police, prison officers and merchant seamen when at sea are not permitted to strike. These are issues where there are difficulties of definition, of enforcement and of the international law and our obligations under the International Labour Organisation. I have noted what my hon. Friend said, and I have no doubt that the debate will continue.

Mr. Tony Banks: The Secretary of State will be aware that the Government effectively own the Post Office and get about £400


million profit from its activities. Which other company, when faced with a dispute in its own organisation, would seek to destroy the organisation? That is precisely what the lifting of this monopoly is all about.
Post Office workers are not the best paid workers in the world. We owe them more than perhaps any other group of workers for the services that they give us as Members of Parliament. We should be supporting them. They will see the lifting of the monopoly as nothing more than stinking blackmail from a stinking Government.

Mr. Lang: The hon. Gentleman underlines the fact that the Post Office and the union have an interest in avoiding having the monopoly lifted, which can easily be achieved by the union calling off its industrial disputes—they will be far more damaging to the Post Office and to its staff in the longer term.

Mr. Jacques Arnold: How long does my right hon. Friend think it will take for another U-turn to be performed by the Leader of the Opposition in opposing this strike and splattering his deputy back on that wall?

Mr. Lang: My hon. Friend tempts me to stray into the private grief of the Labour party. I know that there are shadow Cabinet elections this week. I suspect that union sponsorship affects most of the Labour Members' attitudes in these matters.

Mrs. Gwyneth Dunwoody: As the Secretary of State has intervened in this industrial dispute, will he tell us whether it is now the attitude of Her Majesty's Government that, where workers have a ballot to decide their industrial action, they should be overridden by the particular interests of the Conservative party?

Mr. Lang: The fact that the trade union had a ballot to embark on this series of industrial disputes—a ballot that happened as a result of legislation introduced by this Conservative Government, which has caused industrial relations to improve beyond recognition—does not prevent the union from calling off the strike now. It is to protect the public interest that we are urging the union to call off the strike.

Mr. David Lidington: Does my right hon. Friend agree that the real threat to the future of the Royal Mail comes from these strikes, which are costing the Royal Mail millions of pounds and threatening jobs—not merely among people employed by the postal service, but among those in companies that rely on a regular and punctual mail service for the future of their business?

Mr. Lang: My hon. Friend is absolutely right. One of the reasons why this country's economic performance has improved so dramatically in recent years is the dramatic improvement in our industrial relations. Eternal vigilance is required by us to ensure that the improved industrial relations record that we have achieved is not forfeited, and that it does not fall prey to the Labour party.

Mr. Harry Barnes: Is not this about dividing up the Post Office, undermining it and

reaching a situation in which privatisation is achieved in the end? Once the Government get their teeth into something they never let it go, despite the strength of public opinion. Everyone should be aware of that, and ensure that we do not accept privatisation.

Mr. Lang: This dispute is not about privatisation, but about the abuse of a public monopoly. Where there is a monopoly there are obligations. The union should be more aware of its obligations to the public interest before calling these damaging strikes.

Mr. Peter Thurnham: The President of the Board of Trade is to be congratulated on his actions so far, but will he now meet industry representatives to consider a permanent reduction in the monopoly—from £1 to 30p, for example? That would certainly help companies, such as Document Interlink in my constituency, to provide a first-class service for urgent business mail.

Mr. Lang: That is an issue for consideration at a later date. I think that my hon. Friend would agree with me that the current priority is to ensure that this damaging series of strikes is called off. I have made provision for the lifting of the monopoly not to come into force if the forthcoming series of strikes is cancelled, and for the lifting to last for only one month if the series of strikes is not followed by further strikes. If there is a threat by the union of further strikes, however, I shall announce that we are considering extending the suspension for a further three months. I hope that that will not be necessary.

Mr. Nigel Spearing: Will the Secretary of State for Trade and Industry deny that there have been substantial increases in productivity in the Post Office in recent years, and that the matter that is in dispute is a relatively small one, which is now before ACAS? As for the public interest, will not the whole nature of the historic Royal Mail be changed if the monopoly is taken away? How will the public be assured that the Government are taking away the monopoly in the public interest and not in the interests of a few people who run high-speed, limited mail services, and who may recently have had a dinner with the Prime Minister?

Mr. Lang: My statement today is not about the removal of the monopoly in the long term but about the suspension of the monopoly as a means of ensuring that the public interest is protected. If the dispute is as close to resolution as the hon. Gentleman suggests, clearly he should be pressing the union to call off the strikes so that the matter can be peacefully resolved.

Mr. John Marshall: When my right hon. Friend hears about threats to rural post offices, will he remember that similar fears were expressed when British Telecom was privatised? Those fears were groundless, as are these fears about the future of rural post offices. Will he also comment on the fact that the Communication Workers Union contributes £200,000 to the Labour party?

Mr. Lang: I hear what my hon. Friend says in the first part of his question. As for the second part of his question, that fact speaks for itself.

Mr. Kevin Hughes: Will the right hon. Gentleman assure the House that none of the business men who have recently paid £100,000 to be members of the Prime Minister's Premier Club will profit from the decision that the right hon. Gentleman has made today?

Mr. Lang: The people who will profit from today's decision—if it brings closer a resolution to this dispute—will be the public.

Mr. Andrew Miller: What contingency plans does the Secretary of State have if, as a result of his interference, the dispute is racked up to a higher level and the Post Office decides to lock out some or all of its employees?

Mr. Lang: I wish that the Labour party, and the hon. Gentleman in particular, would be more positive and constructive in their approach to the dispute. We should be talking about resolving the dispute. Labour Members have the capacity to bring pressure to bear on their trade union masters to abandon the strikes, so that the dispute can be resolved.

Dr. John Reid: rose—

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Phillip Oppenheim): He has just walked in.

Madam Speaker: Order. The hon. Gentleman has not just walked in. He has been in his place—I saw him.

Dr. Reid: Thank you, Madam Speaker. As usual, the Under-Secretary of State has got his facts wrong.
I much regret the inconvenience caused to the public, but if there is one thing that they dislike more than inconvenience, it is corruption. If the Secretary of State gets rid of the monopoly, will he give the public a guarantee that no company whose members have paid large amounts of money to dine with the right hon. Gentleman or the Prime Minister will benefit from the lifting of the monopoly? Will the right hon. Gentleman answer yes or no?

Mr. Lang: The people who will benefit in the short term will be the companies that secure additional business by becoming involved in carrying the mail from which the monopoly has been suspended. The best way in which the hon. Gentleman can deal with his concern is to ensure that the strikes are abandoned. The monopoly would then stay in place.

Mr. Bruce Grocott: As the Secretary of State has failed to answer this question twice, I will repeat it slowly. Can the right hon. Gentleman give a categorical guarantee that no one who is currently paying large sums of money to the Tory party, via the Premier Club or any other means, will benefit from the industrial dispute?

Mr. Lang: I give the hon. Gentleman the same answer that I gave the hon. Member for Ellesmere Port and

Neston (Mr. Miller). I wish that Labour Members who have benefited from trade union sponsorship and financial support would put aside their commitment to their trade union masters and act for once in the public interest.

Mr. Tam Dalyell: On a point of order, Madam Speaker. I am not too sensitive a soul, but is not there a convention that Ministers make statements by leave of the House? That implies some kind of condition—that the statement will be about a particular matter. When the President of the Board of Trade answered my right hon. Friend the Member for Derby, South (Mrs. Beckett) we heard a load of pre-packaged abuse that bore no relevance to the legitimate questions that she asked. Do you, have no power to cut short statements that are not about the subject to which they purport to relate?

Madam Speaker: Ministers do not require the leave of the House or my authority to make a statement—they have every right. The words "With the leave of the House" are simply a turn of phrase, and it is quite incorrect for a Minister to use them. Ministers can make statements in the House whenever they wish.

Mr. Nigel Spearing: Further to that point of order, Madam Speaker.

Madam Speaker: Order. I have hardly finished. I was asked whether I can cut short a statement if I felt that it was not dealing with the subject in question. The straightforward answer is no. I do not know with which matters a statement deals until the Minister rises in his place to make it.

Mr. Spearing: Further to that point of order, Madam Speaker. We fully understand everything that you have said to this point, but surely it is within your power to cut short any right hon. or hon. Member—whether or not he is a Minister—who fails to answer a question but introduces new material that is abusive and irrelevant? Will you consider that particular power—which I believe you have?

Madam Speaker: I sit in the Chair hour after hour, and I hear Front Benchers and Back Benchers in all parts of the House introduce material that is not relevant. If I were to interfere every time that happened, I would be interfering every three or four minutes. I take the hon. Gentleman's point seriously—but the House would hear much more from me if I were to take it to its logical conclusion. I said not too long ago that there have been numerous occasions recently when hon. Members have not dealt with the matter in question, be it a statement or question. Ministers and Back Benchers are drifting too far away from the point, and I will do my utmost to bring them all back to the subject on the Order Paper. I believe that the House requires that of me.

Points of Order

Mr. Robert G. Hughes: On a point of order, Madam Speaker. Last week, the deputy leader of the Labour party visited Harrow. My hon. Friend the Member for Harrow, East (Mr. Dykes) and I are keen that he should visit Harrow as often as possible because it is good for our votes. However, the courtesy of the House is for hon. Members who are visiting the constituencies of other hon. Members to let them know. Not only did the right hon. Member for Kingston upon Hull, East (Mr. Prescott) not let us know that he was visiting our constituencies, but when my hon. Friend reminded him of the usual courtesy, he used my hon. Friend's letter to ridicule the suggestion that people should abide by such courtesies.
Could you give us your advice, Madam Speaker, on how we might protect ourselves from such an abuse of the courtesies of the House? Perhaps the deputy leader of the Labour party regards himself as too important to abide by such courtesies.

Madam Speaker: This matter is raised with me several times a week. Quite frankly, it is very juvenile to raise such a point of order on the Floor of the House. I should have thought that the hon. Gentleman could deal perfectly adequately with the deputy leader of the Labour party and not use the time of the House, on a very busy day, to raise such an issue.

Ms Joyce Quin: On a point of order, Madam Speaker. Has there been a request from the Secretary of State for Social Security to make an oral statement about his decision to privatise, against the wishes of the civil servants involved, the child benefit centre in Washington? Surely such an important issue should not be left simply to a written answer.

Madam Speaker: No Government Department has told me that it is seeking to make such a statement. As I explained earlier, I have no control over statements and I cannot demand them from a Minister. I have not been advised that the Secretary of State is seeking to make a statement, at least today, on that issue.

Mr. Bill Walker: On a point of order, Madam Speaker. Is item 2 on the Order Paper, the Adjournment (Summer) motion, debatable?

Madam Speaker: No, it is not debatable.

Mr. John McFall: On a point of order, Madam Speaker. Overnight, there was a break-in at Clyde

submarine base, which houses Trident submarines, by seemingly amateur intruders. Had they been armed terrorists, the consequences would be too horrible to imagine. Given that there was a similar break-in seven years ago, when the then Prime Minister ordered a board of inquiry investigation, has the Secretary of State for Defence taken this regrettable incident equally seriously and ensured that a statement will be made to the House?

Madam Speaker: I have not been informed that a statement is to be made on that incident. However, before the House goes into recess, there will be opportunities for the hon. Gentleman to raise the issue if he so wishes.

Mr. Tony Banks (Newham, North-West): On a point of order, Madam Speaker. You will have heard many references—and no doubt seen reports in the press over the weekend—to the Premier Club, where business people apparently spend large sums of money wining and dining with Ministers. As it is alleged that some people pay up to £100,000 for dinner with the Prime Minister—which clearly cannot be for either the food or the company—do you think you should ask the Serjeant at Arms to investigate to ensure that the facilities of this House are not being used for what are clearly party political purposes: to raise money for the Conservative party and to buy influence in Government decisions?

Madam Speaker: I do not have to ask the Serjeant at Arms; I know what the facilities of the House are used for, and it is not for any such fund-raising activities.

CONSOLIDATED FUND BILL

Order for Second Reading read.

Question, That the Bill be now read a Second time, put forthwith pursuant to Standing Order No. 54 (Consolidated Fund Bills), and agreed to.

Bill accordingly read a Second time.

Question, That the Bill be now read the Third time, put and agreed to.

Bill accordingly read the Third time, and passed.

ADJOURNMENT (SUMMER)

Ordered,
That this House, at its rising on Wednesday 24 July, do adjourn until Monday 14th October.—[Mr. Wells.]

Housing Bill

Lords amendments considered.

Mr. Nick Raynsford: On a point of order, Madam Speaker. You will be aware of the huge volume of amendments with which the House is being asked to deal this afternoon—no fewer than 329. Some are minor and technical, but many are not. There are 31 new clauses and three new schedules; one of the new schedules is 21 pages long. The bundle of Lords amendments covers 85 printed pages, considerably more than most of the Bills that have been presented during this Session.
Is it not an abuse of parliamentary procedure for such an enormous volume of lengthy and substantial new legislation to be presented at this late stage in the proceedings, when there is no opportunity for detailed scrutiny? Does that not bring into disrepute our procedures, which are supposed to ensure that legislation is properly scrutinised? Does it not make it far more likely that—either during the next Session, or during the one after that—we shall have to deal with amendments tabled to remedy defects in legislation that has been drafted hastily, and has not been subject to proper scrutiny?
May I ask you to give the matter some thought and to advise us—not necessarily this afternoon—whether steps can be taken to ensure that, in future, the House is not asked to consider such an impossibly large volume of amendments so late in the process, when there is not adequate time for full and adequate scrutiny of the legislation?

The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): Further to that point of order, Madam Speaker. The number of amendments demonstrates the opposite of what the hon. Member for Greenwich (Mr. Raynsford) suggested. In Committee, when a point was raised that I thought worthy of reflection, I said that I would take it away and look at it. That happened throughout our deliberations. We have shown that the procedures work, if hon. Members on both sides of a Committee want to secure the best possible form of legislation. Most of these measures are technical, and reflect the openness with which we debated the Bill.

Madam Speaker: I have noted the points raised by the hon. Member for Greenwich (Mr. Raynsford). As he is fully aware, it is the Government who arrange the business of the House—the Minister has just explained that—and the Government will have noted what the hon. Gentleman had to say. Let me say for my part that I am sure that the hon. Gentleman is so familiar with the Bill that he is quite capable of coping with the business before us.

Clause 1

THE REGISTER OF SOCIAL LANDLORDS

Lords amendment: No. 1, in page 1, line 13, leave out ("Part") and insert ("section").

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 2, 17, 23, 24 and 26.

Mr. Curry: These are technical amendments, which enable the register to be introduced in an orderly manner on a phased basis.

Lords amendment agreed to.

Lords amendment No. 2 agreed to.

Clause 2

ELIGIBILITY FOR REGISTRATION

Lords amendment: No. 3, in page 1, line 17, at end insert ("which is a housing association").

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 4 to 9.

Mr. Curry: Again, this is a tidying-up amendment.

Lords amendment agreed to.

Lords amendments Nos. 4 to 9 agreed to.

Clause 8

POWER OF REGISTERED SOCIAL LANDLORD TO DISPOSE OF LAND

Lords amendment: No. 10, in page 5, line 24, leave out subsection (3).

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 11, 12, 27, 28 and 34.

Mr. Curry: The purpose of the amendments is to clarify when the Housing Corporation's consent is required by a registered social landlord seeking to dispose of land. Some of them also clarify when the corporation can serve a notice to obtain information, and one would add to the list of topics on which the corporation may issue housing management guidance.

Mr. Raynsford: The Opposition welcome the amendments, especially Lords amendment No. 34, which increases the number of subjects on which the Housing Corporation may issue guidance. That particularly highlights the issue of devolution to tenants of decisions concerning the management of housing accommodation.
I put it to the Minister, however, that there is an inherent conflict between this provision—which we welcome—and the extremely restrictive guidance that the Housing Corporation has been issuing on its ability to register as social landlords organisations containing a majority of tenants on the board, or in which the tenants have the major interest in the new social landlord. If the advice that is to be issued by the Housing Corporation is


to be meaningful and not ridiculous, it will be necessary for it to reconsider that blanket restriction on its ability to register social landlords with the majority of tenant representatives.
I understand from the Housing Corporation that the decision was not taken by it uniquely or on its own initiative, but that there is a presumption on the part of the Government that such bodies should not be registered. Government action will therefore be necessary in order to avoid the Housing Corporation being put in a ridiculous position.
Despite the Minister's comments about the reason for the large number of amendments with which we are dealing today, the consequence of the way in which matters have been handled is that an enormous volume of material is being considered at the very latest of stages in the Bill's progress through Parliament, and, sadly, many loose ends of this nature will not be sorted out properly in the time available.

Mr. Curry: There is one area in which we have made it clear that we do not expect there to be majorities for any of the constituent parties—the new housing companies. I am willing to discuss with the Housing Corporation any other matter that concerns the guidance it issues, in the context not only of its guidance but of guidance that will necessarily follow this legislation.

Lords amendment agreed to.

Lords amendments Nos. 11 and 12 agreed to.

Clause 12

PRIORITY OF CHARGE FOR REPAYMENT OF DISCOUNT

Lords amendment: No. 13, in page 7, line 24, leave out ("in writing")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 14, 30, 32, 38, 41, 74 to 81, 243 and 271.

Mr. Curry: This group is technical down to its fingertips.

Lords amendment agreed to.

Lords amendment No. 14 agreed to.

Clause 15

RELEVANT AND EXEMPTED DISPOSALS

Lords amendment: No. 15, in page 10, line 3, leave out from third ("of') to end of line 8 and insert
("any such order as is mentioned in subsection (5A);")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 16, 138 to 140, 167, 168, 242 and 315.

Mr. Curry: This group is technical. It reconciles the Bill to other housing legislation and other housing legislation to legislation that deals with matrimonial breakdown. I commend it to the House.

Lords amendment agreed to.

Lords amendments Nos. 16 and 17 agreed to.

Clause 17

RIGHT OF TENANT TO ACQUIRE DWELLING: SUPPLEMENTARY PROVISIONS

Lords amendment: No. 18, in page 12, line 5, at end insert—
("( ) Before making an order which would have the effect that an area ceased to be designated under subsection (1)(b), the Secretary of State shall consult—

(a) the local housing authority or authorities in whose district the area or any part of it is situated or, if the order is general in its effect, local housing authorities in general, and
(b) such bodies appearing to him to be representative of registered social landlords as he considers appropriate.")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.
Some concern was expressed about the possible removal of the exemption from the purchase grant in rural areas for housing association tenants. The fear was that the Secretary of State might act arbitrarily. We have therefore tabled this amendment so that the Secretary of State must consult before there is any removal from the list of settlements that are designated not to have the right to buy. I commend it to the House.

Mr. Raynsford: The Opposition welcome the amendment for the reasons that the Minister has made clear. It ensures that the Secretary of State will have to consult the relevant local housing authority or authorities before reaching a decision. It also requires the Secretary of State to consult bodies that appear to him to be representative of registered social landlords.
I would welcome some guidance from the Minister on what will be the Housing Corporation's broad approach to deciding which organisations are representative of registered social landlords. I assume that the Secretary of State will be seeking guidance from the Housing Corporation on the matter.
Will every social landlord operating in this area be consulted, or will only a relatively small number be consulted? If the latter, what will be the criteria for deciding which ones are appropriate? In some areas, many social landlords operate, and it might prove completely impractical to consult all of them. On the other hand, if the Secretary of State were arbitrary in his choice of consultees, an entirely fair point of view might not be registered by social landlords in the area. It would be helpful to have an indication as to how this discretion is likely to be exercised.

Mrs. Diana Maddock: I and my colleagues welcome the amendment also, although I am sorry that it does not go as far as the amendments that I tabled in Committee. But the amendment recognises the importance of the view of local authorities in dealing with the provision of social housing. I look forward to the Minister saying who else he will consult, because, as the hon. Member for Greenwich (Mr. Raynsford) said, it


could be a number of people in some areas, and we need guidance on that. In general, however, I welcome the amendment.

Mr. Curry: This is a question of common sense. I envisage that the Housing Corporation will wish to consult what will become the National Housing Federation, and it will consult the landlords operating in a particular area. Settlements of 3,000 do not have hundreds of housing associations, nor do rural areas, and a handful will specialise in this field. I do not envisage practical difficulties, and it is our intention to consult fully.

Lords amendment agreed to.

Clause 24

THE DISPOSAL PROCEEDS FUND

Lords amendment:  No. 19, in page 15, line 39, leave out from ("section") to ("do") in line 40 and insert
("27 below (recovery, &amp;c. of social housing grants) and section 52 of the Housing Act 1988 (recovery, &amp;c. of grants under that Act and earlier enactments)")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): With this, it will be convenient to discuss also Lords amendments Nos. 20 to 22 and 25.

Mr. Curry: These amendments are absolutely technical, and I commend them to the House.

Lords amendment agreed to.

Lords amendments No. 20 to 28 agreed to [some with Special Entry].

Clause 31

ENFORCEMENT OF NOTICE TO PROVIDE INFORMATION, &C.

Lords amendment: No. 29, in page 19, line 16, at end insert—
("( ) Proceedings for an offence under subsection (I) or (2) may be brought only by or with the consent of the Corporation or the Director of Public Prosecutions.")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 31, 33, 35, 36, 269 and 270.

Mr. Curry: These amendments deal with proceedings for offences committed by social landlords, and provide that proceedings for such offences can be initiated only with the consent of the Housing Corporation or the Director of Public Prosecutions. Their purpose is to protect social landlords from vexatious prosecutions, and they are consistent with other legislation covering the matter.

Lords amendment agreed to.

Lords amendments Nos. 30 to 36 agreed to.

Clause 39

INSOLVENCY, &C. OF REGISTERED SOCIAL LANDLORD: SCHEME OF PROVISIONS

Lords amendment: No. 37, in page 23, line 13, leave out ("(section 47)") and insert
("(sections 47 and (Powers of the manager: transfer of engagements))")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 40, 47, 50, 57, 58, 61 to 64, 66 to 69 and 71.

Mr. Curry: These are minor amendments to improve the way in which the clause works. There is no issue of policy or principle involved, and I commend them to the House.

Mr. Raynsford: I want to draw attention to Lords amendment No. 71, which makes provision for the manager appointed by the Housing Corporation in such cases to arrange a transfer of engagements where a housing association is in financial difficulty. The transfer ensures that the properties can continue to be managed without the risk of the tenants being forced to leave their homes.
We especially welcome that provision, because, earlier this year, the Government tabled a series of measures in the Housing Bill, which were subsequently withdrawn, that would have put at risk a significant number of tenants whose homes were owned by housing associations that got into difficulty. By applying the Insolvency Act 1986, the Government would have made it much more difficult to use procedures such as those now proposed. A transfer of engagements ensures continuity of management and, more importantly—from the lender's point of view—continuity of income stream.
Everyone involved with the housing world knows how important it is to ensure that confidence is maintained among lenders, but, equally, how vital it is to ensure that tenants are not put at risk by difficulties that may from time to time confront their housing associations. We welcome Lords amendment No. 71, but regret that the Government have gone a tortuous way to get to it. However, we are moving towards a more satisfactory framework, which should ensure that proper arrangements are in place to deal with housing associations that get into financial difficulty, without putting tenants at risk of losing their homes.

Lords amendment agreed to.

Lords amendment No. 38 agreed to.

Clause 40

INITIAL NOTICE TO BE GIVEN TO THE CORPORATION

Lords amendment: No. 39, in page 24, line 10, leave out ("charitable trust") and insert
("registered charity (other than a company registered under the Companies Act 1985)")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 42 to 46, 48, 49, 51, 54, 56, 59 and 65.

Mr. Curry: These are purely drafting amendments, which I commend to the House.

Lords amendment agreed to.

Lords amendments Nos. 40 to 51 agreed to.

Clause 43

PERIOD OF MORATORIUM

Lords amendment: No. 52, in page 25, line 35, leave out subsection (1) and insert—
("(1) The moratorium in consequence of the taking of any step as mentioned in section 41—

(a) begins when the step is taken, and
(b) ends at the end of the period of 28 days beginning with the day on which notice of its having been taken was given to the Corporation under that section,
subject to the following provisions.")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 53, 55, 60, 70, 72 and 73.

Mr. Curry: We had a considerable debate in Committee about what would happen in the event of a new social landlord becoming bankrupt or getting into financial difficulty. We provided that the Housing Corporation would be able to step in for a cooling-off period to protect the interests of all the parties—the tenants as much as the lenders. A small problem, rather than a significant one, could arise that could be sorted out shortly after the introduction of the so-called cooling off period.
The amendments allow the Housing Corporation to suspend a moratorium when the problem that provoked it has been solved, and it no longer needs to make a proposal. The Housing Corporation must consult the lender before calling it off, but this is a common-sense amendment, which I commend to the House.

Mr. Raynsford: I shall discuss Lords amendments Nos. 60, 70 and 73. We greatly welcome Lords amendment No. 60, which gives effect to a point that we pressed in Committee. It will ensure that members of the committee of a housing association are not required by the duties imposed by the Bill to act in a way contrary to their fiduciary or other duties towards the proper running and management of their association.
Lords amendment No. 70 is equally welcome. It specifies that the manager appointed by the Housing Corporation in such cases
shall, so far as practicable, consult the landlord's tenants about any exercise of his powers which is likely to affect them and inform them about any such exercise of his powers.

The Minister will have anticipated my question. Might not the words "so far as practicable" provide an opportunity for some managers to disregard the obligation, which I believe Parliament wishes them to honour, to ensure that tenants are properly consulted?
I hope that that will not be the case, but sadly one knows of instances in which such words have been used as loopholes. While I understand that the Government do not want to require an absolutely binding obligation, which the manager might not be able to honour in all circumstances, there is a risk that the provision might be used to short-circuit the proper consultation processes with tenants—perhaps if a considerable amount of money is at stake or the lender puts on a lot of pressure to try to resolve the problem quickly and get new arrangements into place without delay. I hope that the Minister can give an assurance on that point.
4.30 pm
Amendment No. 73 involves the deletion of subsection 49(3), which simply states:
Except as provided by this section, the actions of a manager appointed under section 46 shall not be questioned by any legal proceedings whatever.
The removal of that subsection raises a question whether the manager might be frustrated in his actions if he were threatened with legal action by one of the parties—possibly an unsecured creditor, unhappy with the approach being taken by the manager, who will be predominantly interested in the point of view of the secured creditors and the lenders in particular.
The threat of legal action could cut across or interfere with a manager's ability to exercise his powers, which could be damaging. I would welcome some explanation from the Minister of why the amendment appears to delete that proposed immunity.

Mr. Curry: With the leave of the House, Mr. Deputy Speaker, I must draw amendment No. 55 to the hon. Gentleman's attention. That requires:
So far as practicable no proposals shall be made
that would leave
unsecured creditors
worse off than they would otherwise have been. Amendment No. 60 makes it clear that the duty of members, directors and trustees to co-operate with the implementation of the proposal does not require them to act in a manner contrary to their fiduciary obligations.
The reference to "so far as practicable" in amendment No. 70 is intended to be directed towards taking the action, rather than giving a loophole to enable people not to take it. So the amendment has to be taken at its face value. We would not have proposed it, had we intended it merely to be platonic in its effect. It is intended to make managers have the firm intention of consulting, unless there is a clear reason why that cannot be done.

Lords amendment agreed to.

Lords amendments Nos. 53 to 81 agreed to.

Clause 64

MAKING AND APPROVAL OF REGISTRATION SCHEMES

Lords amendment: No. 82, in page 36, line 51, at end insert
("and to renew the registration as and when required by the scheme.")

The Parliamentary Under-Secretary of State fur the Environment (Mr. James Clappison): I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 83 to 91.

Mr. Clappison: The purpose of this group of amendments is to improve the working of local authority registration schemes for houses in multiple occupation. They deal principally with the content of schemes, publicity, and appeals against local authority decisions on applications for registration.

Mr. Raynsford: We welcome the amendments so far as they go. There is no question but that more effective powers are needed to deal with the problems of houses in multiple occupation. It is well known that multi-occupied houses contain not merely the worst conditions of any category of housing, but also the greatest risks to life from both fire and carbon monoxide poisoning. There is widespread agreement that action is long overdue to ensure that the worst conditions are tackled more effectively. We differ from the Government on the best way to do so.
There is an overwhelming case for a national mandatory licensing scheme to cover all areas and all multi-occupied houses, concentrating in the first instance on those in which there is the greatest risk on a proper risk assessment basis. The Government have proposed a more limited registration scheme instead, which will be discretionary, and so will not apply if a local authority chooses not to operate the scheme in its area, and will apply only to a more limited category of multi-occupied houses.
We have serious reservations about the likely effectiveness and scope of the Government's scheme. Nevertheless, a scheme is better than nothing, even if it is a limited scheme, so we welcome the amendments made by the other place, which give effect to some of the measures that we advocated in Committee.
In particular, we welcome amendment No. 88, which inserts as a ground for refusal of registration reference to the person managing or having control of the property not being a fit and proper person.
We also welcome the arrangements under clause 91 for keeping copies of the registration scheme and making them available to people on request on reasonable terms. Those are important provisions to ensure that people who are not fit and proper persons can be denied registration, and that people involved—I think in particular of the residents living in multi-occupied houses, who have a particular interest in the matter—can seek information from the local authority about how the scheme is framed and how it operates.
I put it to the Minister that, if there was a national mandatory scheme, life would be much easier, because there would not be the likelihood of variations from area to area in the way in which the scheme operated. The tenant would be able to contact the Department of the Environment, which could issue a national advice leaflet providing information applicable in all areas. That is something which we shall wait for the next Government to introduce, but in the meantime we welcome the steps that have been taken to improve the registration arrangements.

Mrs. Maddock: I and my hon. Friends welcome the amendments. Like the hon. Member for Greenwich (Mr. Raynsford), I am disappointed that there will not be a mandatory scheme. I particularly welcome the fact that it will be easier for councils which have a registration scheme to get works done. That has always been a problem in the past. We discussed the matter at length in Committee, and I hope that what the Government propose will work.
In common with many people outside the House, we would like a mandatory scheme. The local authorities asked for a mandatory scheme. Despite the improvements in the amendments, the scheme will not be mandatory, and that is the real weakness of this part of the Bill. However, the amendments are an improvement on the position that we were left with in Committee, and I welcome them.

Lords amendment agreed to.

Lords amendments Nos. 83 to 91 agreed to.

New clause

Lords amendment: No. 92, after clause 72, to insert the following new clause—Section 354 direction to be local land charge—
. In section 354 of the Housing Act 1985 (power to limit number of occupants of house), at the end insert—
"(8) A direction under this section is a local land charge.".

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to take Lords amendments Nos. 94, 95 and 320.

Mr. Clappison: This is a group of miscellaneous amendments relating to houses in multiple occupation. Amendment No. 95 allows local housing authorities eight weeks instead of four to decide whether to make a compulsory purchase order which defers the obligation to prepare and serve a management scheme for a house in multiple occupation, subject to a control order.

Lords amendment agreed to.

New clause

Lords amendment: No. 93, after clause 73, to insert the following new clause—Works notices: improvement of enforcement procedures—
. After section 377 of the Housing Act 1985 insert—

"Works notices: improvement of enforcement procedures
377A.—(1) The Secretary of State may by order provide that a local housing authority shall act as specified in the order before serving a works notice.


In this section a "works notice" means a notice under section 352 or 372 (notices requiring the execution of works).
(2) An order under this section may provide that the authority—

(a) shall as soon as practicable give to the person on whom the works notice is to be served a written notice which satisfies the requirements of subsection (3); and
(b) shall not serve the works notice until after the end of such period beginning with the giving of a notice which satisfies the requirements of subsection (3) as may be determined by or under the order.
(3) A notice satisfies the requirements of this subsection if it—

(a) states the works which in the authority's opinion should be undertaken, and explains why and within what period;
(b) explains the grounds on which it appears to the authority that the works notice might be served;
(c) states the type of works notice which is to be served, the consequences of serving it and whether there is a right to make representations before, or a right of appeal against, the serving of it.
(4) An order under this section may also provide that, before the authority serves the works notice on any person, they—

(a) shall give to that person a written notice stating—

(i) that they are considering serving the works notice and the reasons why they are considering serving the notice; and
(ii) that the person may, within a period specified in the written notice, make written representations to them or, if the person so requests, make oral representations to them in the presence of a person determined by or under the order; and
(b) shall consider any representations which are duly made and not withdrawn.
(5) An order under this section may in particular—

(a) make provision as to the consequences of any failure to comply with a provision made by the order;
(b) contain such consequential, incidental, supplementary or transitional provisions and savings as the Secretary of State considers appropriate (including provisions modifying enactments relating to the periods within which proceedings must be brought).
(6) An order under this section—

(a) may make different provision with respect to different cases or descriptions of case (including different provision for different areas), and
(b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(7) Nothing in any order under this section shall—

(a) preclude a local housing authority from serving a works notice on any person, or from requiring any person to take immediate remedial action to avoid a works notice being served on him, in any case where it appears to them to be necessary to serve such a notice or impose such a requirement; or
(b) require such an authority to disclose any information the disclosure of which would be contrary to the public interest."."

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment embodies the principles of the Deregulation and Contracting Out Act 1994 in relation to the provisions of the Bill.

Mr. Raynsford: This amendment raises a much more problematic issue—the speed with which a local authority will be able to act enforce improvements in properties that are unsatisfactory.
As the Minister said, the amendment draws on procedures in the Deregulation and Contracting Out Act 1994. The Minister will be well aware that precisely this ethos of deregulation, with which the Government are at times obsessed, is a serious problem in relation to multi-occupied houses, where there is a clear need for regulation.
The risk to human life created by the poor conditions, the threats and the hazards that exist in so many multi-occupied houses makes regulation essential. The Government have had to accept the need for a registration scheme for some multi-occupied houses.
The risk is that, because of their obsession with deregulation, the Government are putting in place a procedure that will make it slow and cumbersome for local authorities to operate, and so delay the process of improving substandard properties that urgently need improvements.
The concept behind the new clause that is incorporated in the Bill by Lords amendment No. 93 is that there should be a procedure for serving preliminary informal notices on the landlord before the local authority moves to impose its actual works notices, setting out what is required to be done. In principle, one has no disagreement with giving an informal notice to a landlord at the earliest possible stage, and only then following up with a works notice if the landlord clearly does not intend to act on it, but putting that in the Bill provides an opportunity, which I fear will be exploited by some bad landlords, to frustrate the process by seeking to challenge a local authority that acts reasonably expeditiously because it knows that there is a serious—possibly life-threatening—problem in that property.
The rogue landlord, advised by clever lawyers who may be less scrupulous than some, might well use the provisions of subsection (4) of the new section 377A, which is being incorporated into the Housing Act 1985 by Lords amendment No. 93, to challenge the validity of action taken by a local authority seeking to serve a notice.
If that were the case, and the authority were prevented from taking expeditious action because of the need to go through all the legal procedures, which can often be long drawn out and tortuous, and if in the meantime there were to be a tragedy and a person were to be killed because of a fire or die from carbon monoxide poisoning, that would be an unacceptable and unnecessary situation, brought about by the potential for delay.
We do not object to the principle, as good practice, of serving an informal notice quickly, but there must be no risk of the actual enforcement action being delayed by the opportunity that may be presented to the unscrupulous or disreputable to try to drag out the proceedings and so delay proper enforcement action.

Mr. Clappison: With the leave of the House, Mr. Deputy Speaker. May I draw the attention of the hon. Member for Greenwich (Mr. Raynsford) to the way in which subsection 93(7) overrides subsection 93(4) and deals with the point that he has just made?

Lords amendment agreed to.

Lords amendments Nos. 94 and 95 agreed to.

Clause 78

RESTRICTION ON TERMINATION OF TENANCY FOR FAILURE TO PAY SERVICE CHARGE.

Lords amendment: No. 96, in page 50, line 37, at end insert—
("( ) The reference in subsection (1) to premises let as a dwelling does not include premises let on—

(a) a tenancy to which Part II of the Landlord and Tenant Act 1954 applies (business tenancies),
(b) a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 in relation to which that Act applies, or
(c) a farm business tenancy within the meaning of the Agricultural Tenancies Act 1995.")

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 97, 98, 24'7 and 322.

Mr. Clappison: The purpose behind this group of amendments is to change the application of clause 78, which prevents actions for forfeiture of a lease for non-payment of service charges until the amount has been agreed or determined. That removes one of the weapons that has been used by some landlords whose standards have fallen short. Lords amendment No. 98 has been introduced to provide that, if a section 146 notice requiring the tenant to pay the service charge is served by the landlord, it must clearly set out the effect of these new restrictions, and that warning must be given in conspicuous characters.

Mr. Raynsford: As the Minister said, this is an important measure relating to problems facing leaseholders who are threatened, or have been threatened in the past, by the prospect of forfeiting their lease because of a dispute about, for example, service charges.
We very much welcome the steps that have been taken under pressure. As a result of the campaign that the Labour party has maintained throughout the past year on behalf of leaseholders, the Government have moved to some extent to deal with these problems. Later, we shall debate the Government's failure to act adequately in other areas where there is a need for more effective action, but this is a proper and appropriate response to close the forfeiture loophole.
We very much welcome the requirement that leaseholders be informed, because there is a risk that, despite Parliament's best intentions, leaseholders may find themselves threatened with forfeiture without being told of their right to challenge the landlord's entitlement to seek forfeiture for a service charge dispute.
We welcome the new clause, which we believe will help leaseholders. It is part of a much wider package of measures of leasehold reform that is necessary, only part of which is addressed by the Bill; nevertheless, the new clause is a step in the right direction.

Lords amendment agreed to.

Lords amendments Nos. 97 and 98 agreed to.

Clause 79

DETERMINATION OF REASONABLENESS OF SERVICE CHARGES

Lords amendment:  No. 99, in page 52, leave out lines 32 to 47 and insert—
("( ) The power to make regulations under section 74(1)(b) of the Rent Act 1977 (procedure of rent assessment committees) extends to prescribing the procedure to be followed in connection with any proceedings before a leasehold valuation tribunal under this Act.
( ) Such regulations may, in particular, make provision—

(a) for securing consistency where numerous applications under this Act are or may be brought in respect of the same or substantially the same matters; and
(b) empowering a leasehold valuation tribunal to dismiss an application, in whole or in part, on the ground that it is frivolous or vexatious or otherwise an abuse of the process of the tribunal."")

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 100 and 101, Lords amendment No. 102, Government amendments (a) and (b) in lieu thereof and Lords amendments Nos. 103, 104 and 129.

Mr. Clappison: We now come to the important subject of leasehold valuation tribunals. I shall invite the House to agree with the Lords in the amendments, save for Lords amendment No. 102, with which I shall invite the House to disagree.
The amendments make new provision for procedures to be followed by leasehold valuation tribunals when hearing service charge disputes. Lords amendment No. 99 makes provision for leasehold valuation tribunals to secure consistency in handling separate cases about the same issue. For example, if a number of tenants in a block challenge the same service charge, it may be convenient to hear the separate cases together. This mirrors procedures that are often followed in the county court and High Court. It also allows leasehold valuation tribunals to strike out frivolous or vexatious cases or those which are an abuse of process.
Lords amendment No. 101 allows leasehold valuation tribunals to apportion the reimbursement of fees, as they think appropriate to the circumstances of the case.
Lords amendment No. 103 allows the court to dispose of that part of the case which it has not remitted to a leasehold valuation tribunal, and to enforce the leasehold valuation tribunal's decision as a decision of the court.
Lords amendment No. 104 is a consequential amending definitional amendment.
Lords amendment No. 129 widens the Secretary of State's regulation-making powers to allow the possibility of having a "pre-trial review" before a single member of the tribunal, to clear the ground before the main hearing—another procedure that will be familiar to those who have used the courts, and often a way of shortening cases.
I shall now discuss Lords amendment No. 102 and Government amendments (a) and (b). I invite the House to disagree with Lords amendment No. 102 but to agree with Government amendments (a) and (b). The amendments concern the level of fees that may be charged


by a leasehold valuation tribunal to an applicant under the new procedures for the resolution of service charge disputes.
It may help the House if I explain the background to the issues. The proposal to give this new jurisdiction to leasehold valuation tribunals was introduced by Government amendments to the Bill in Committee in this place. The initial provision on fees was that, taking one year with another, they should be sufficient to cover the full costs of providing this service.
The measures in the Bill to help protect leaseholders of residential properties were prompted by the bad actions of a minority of landlords who were imposing unreasonable, and in some cases outrageous, service charge demands. Any leaseholder who contested those claims was faced in some circumstances with the immediate threat of forfeiture and an action, usually in the High Court. There are measures in the Bill that deal with this abuse and provide that forfeiture proceedings can no longer be taken until the disagreement about service charges is resolved. This is a significant step to help leaseholders, an important part of our package of reforms which will materially improve the lot of leaseholders.
Leaving the problems of forfeiture to one side, leaseholders currently have the right to challenge unreasonable service charges or to seek to have a new manager appointed if they can show fault with the current manager, but these jurisdictions lie with the county court. The second stage of our proposals is therefore to switch these cases to the leasehold valuation tribunals.
This move has been widely welcomed, on the ground that the tribunal will offer leaseholders a much more effective and cheap method of taking action against the unreasonable behaviour of landlords. This is because leaseholders have found it extremely difficult to challenge freeholders' actions in the courts. Although the initial court fee may be low, leaseholders often face protracted and potentially expensive litigation, and if they lose the case they are exposed to the risk of paying the costs of both sides. Even in normal cases that last for, say, two days, the likely exposure to costs can run into thousands of pounds.
The advantages of going to leasehold valuation tribunals are considerable. They have quicker, less formal procedures, and there is no need for full legal representation. The tribunal will include a professional surveyor who is fully qualified to assess the technical arguments that are likely to arise.
The other important point is that tribunals cannot award costs, so the exposure of leaseholders to the risk of costs will be much reduced.
Those advantages to leaseholders should be kept in mind when considering the fee that should be paid for access to the tribunals. There was little discussion of the full cost recovery principle when the Bill was originally before the House. The matter arose chiefly in another place, when my noble Friend Lord Lucas explained that it was likely that the daily cost of dealing with service charge cases by a tribunal could be as much as £2,000. That does not mean that the fee for hearing any case would be that much, as a detailed fee structure has not been determined, but there was general concern that full

cost recovery would lead to fees of a considerable amount that could wipe out much of the cost advantage of a tribunal compared with county courts.
Various amendments were debated that would seek to limit the amount of fees chargeable. On Third Reading in another place, the Government tabled an amendment to ensure that the fee did not exceed the cost of the service. That would have allowed a considerable element of flexibility to set the fees, either at full cost recovery or at any percentage point below 100 per cent. of costs. A similar amendment was carried in relation to the parallel and new procedures for the tribunal to deal with the appointment of a manager.
For the procedures on service charge disputes, amendment No. 102, moved by Lord Bledisloe, was accepted. It provides that fees for these cases should be no more than the comparable fees in the county court. That would have the effect of setting a maximum of £120 for each case. Much concern was also expressed by noble Lords on both sides of the other place that our proposals for fees to be levied by tribunals offend the basic principle that there should, allegedly, be no charge for access to justice.
I emphasise that such fears are not justified—in the sense that the principle of cost recovery is already established. Indeed, Lords amendment No. 102 accepts the principle of charging fees, as it refers to fees paid in the county court.
It was suggested in another place that it would be breaking new ground to allow tribunals to charge a fee, but that is not so. For instance, if there were an appeal against a case heard by a leasehold valuation tribunal, it would be dealt with by the Lands Tribunal, which has a long-established fee—in these cases, involving a charge of about £250.
I turn next to our reasons for not accepting amendment No. 102 and for tabling amendment (a), which would allow for a maximum fee of £500. We think, given the great advantages of access to the leasehold valuation tribunal, that it is right that applicants should contribute towards the costs of the service. I fully accept that the point of the leaseholder package is to help thousands of leaseholders who have been the subject of deplorable and aggressive behaviour by their landlords. I think that our package achieves that, but we have to have regard to competing demands on the public purse. I am sure that Opposition Members will agree that it is important to strike a careful balance in that respect.
As I have said, the Government amendment moved in another place would have allowed for less than full cost recovery, but our amendment today puts an explicit limit on the face of the Bill. A fee of £500 represents a reasonable balance which will still mean that a substantial proportion of the costs will have to be borne by the taxpayer. It represents an affordable amount, particularly as it will usually be shared between a group of leaseholders in a block of flats. The amendment allows the maximum to be changed by order, but only following an affirmative resolution of both Houses, which will offer hon. Members the opportunity for debate before any changes to the limit are made. We intend to use the power in the usual way to reflect cost changes from time to time.
This does not mean that everyone will pay £500. The precise fee structure has not been worked out and will be subject to wide consultation before this section is


commenced. The Bill already provides for mitigation of the fee in certain cases with respect to the financial position of the applicant. There is also a provision which allows the tribunal to require the other party to reimburse the applicant with the whole or part of the fee if that seems right in the circumstances.

Mr. David Ashby: In Committee, we all envisaged that these actions would be like any others—free. Suddenly and most unfortunately, charges are being introduced.
A fee of about £500 has been mentioned. An arbitrary sum like that is surely very odd. Is it more or less than one could expect if the case were dealt with in the county court?
Lastly, neither my hon. Friend nor I nor anyone else who served on the Committee seems to have thought of an idea that recently occurred to me—why not use magistrates courts? After all, they do licensing and matrimonial actions, so why cannot they deal with these issues too?

Mr. Clappison: As I said earlier, the initial provision on fees was that, taking one year with another, they should be sufficient to cover the full costs of providing the service. As for the amount of costs in the county court, my hon. Friend will know that the fees charged for the court service always include an arbitrary element. The advantage of the leasehold valuation tribunal is that the litigant will not be exposed to the risk of costs, as he would in the county court. My hon. Friend, with his long experience of county courts, will know that I refer to the costs of not just the litigant but the other party to action in the county court. That factor weighs heavily with many litigants and acts as a deterrent to their taking action.
I note my hon. Friend's point about magistrates courts. We believe that the right forum for this type of case is the leasehold valuation tribunal. My hon. Friend will have heard me describe the presence of a qualified surveyor on the tribunal. I am sure that he will agree that it is important for the members of the tribunal to have that sort of expertise. With it, they can make a fair evaluation of the facts much more quickly—another material advantage to be borne in mind.
When designing the fee structure, we will seek to construct a scale of charges that offers a degree of certainty to the applicant before the case starts; in other words, we will not seek to charge a fee relating to the length of the case. We will also see whether it is possible to design a sliding scale of fees relating to the value of the disputed sums—although in cases of this kind that might not prove straightforward.
The discussions that have taken place on this issue, particularly in another place, have been of considerable value in focusing attention on this important issue. What the Government propose strikes the right balance of fairness and equity for all parties. It will be vital to leaseholders and, with the maximum fee set at £500, we believe that it will give them a real opportunity for effective justice at an affordable price.

Mr. Raynsford: This is one of the most important groups of amendments to be considered this evening. It concerns justice for leaseholders and remedies against the abuse of service charges which all too many leaseholders

have experienced in recent years. Throughout these debates, hon. Members have been all too well aware of the problems brought to our attention by a large number of leaseholders and their organisations, highlighting the way in which they have been exploited by far too many rogue landlords—many of whom bought the freehold for relatively little so as to be able to charge disproportionate sums in management, service and insurance charges.
In Committee, the hon. Member for North-West Leicestershire (Mr. Ashby) highlighted some of those abuses. Other Committee members highlighted similar examples of crude and blatant exploitation of leaseholders by unscrupulous freeholders or managing agents. There was general agreement, I believe, that action had to be taken that provided redress and that made it possible for leaseholders to get redress without being deterred by the cost of challenging a freeholder through a legal system which could be expensive. The idea of going to the High Court, for example, to challenge a freeholder is nonsense. It is simply not possible for leaseholders to meet the costs envisaged in such an exercise.
5 pm
There was agreement, therefore, that we wanted a framework that would enable leaseholders to get justice quickly, expeditiously and cheaply. The concept that the leasehold valuation tribunal should be given scope for sorting out such disputes commanded wide support. The hon. Member for North-West Leicestershire has asked whether a magistrates court might take on the function. Until he raised the point, I had not considered that, because the leasehold valuation tribunal seemed to be the right and appropriate body, but the important point, which undoubtedly underlies his question, is the need for justice to be quick and cheap, and for people not to be deterred by the prospect of large fees or serious costs.
In Committee, therefore, we welcomed the concept of leasehold valuation tribunals performing these functions. To my knowledge—I will check Hansard carefully—no one raised the prospect of fees being charged for cases taken to the tribunals. Our assumption in Committee was that access to such tribunals would be free, in the same way as access to other tribunals has been free. It has been an important point of principle that people could take their case to a tribunal without being deterred by fees. That was certainly my understanding.

Mr. Ashby: indicated assent.

Mr. Raynsford: The hon. Gentleman nods to show that that was his understanding too.
For that reason, it was shocking when, in Committee in another place, Lord Lucas, the Government spokesman, announced that he envisaged fees and, when pressed on the scale of fees, said that they could be between £500 and £2,000 a day. The Government justified that by saying that that was the economic cost of dealing with the cases. Frankly, that is a fairly horrifying prospect, but, irrespective of that, fees on that scale would deter any leaseholder from taking their case to a leasehold valuation tribunal, simply because they would be unable to pay such charges.
Consequently, there was a substantial debate in another place, during Committee and Report and on Third Reading only last week, about the adverse impact of fees


being charged in leasehold valuation tribunals. During those debates, hon. Members from a wide range of different political parties highlighted the serious consequences of the Government's proposal to charge fees for access to the tribunals.
First, there is the obvious point about leaseholders not feeling able to take up their right to obtain justice because of a fear of the cost being prohibitive. Secondly, if the fee system were in place, there would be obvious scope for the unscrupulous landlord—we know that these measures are being introduced purely to provide redress against unscrupulous landlords—to intimidate a leaseholder by the prospect of substantial fees and costs. Thirdly—this became increasingly important in the debates in another place—there is the wider point of principle about free access to justice.
My noble Friend Lord Archer of Sandwell spoke for the whole House, I believe, when he raised the concern that this would be the thin end of wedge, saying that, if the Government got their way on charging fees for leasehold valuation tribunals, shortly, we would be hearing proposals for fees to be charged for other tribunals. Clearly, that anxiety exercised the minds of many Members of the other House.
Viscount Bledisloe, who moved amendment No. 102, which was ultimately successful, made the point that it was entirely inconsistent of the Government to suggest that, while citizens have access to other tribunals without having to pay a fee, those who wish to challenge service charges should be subject to a fee—a different treatment of leaseholders from that of other people seeking redress through tribunals.
As the House knows, the Government were defeated. As a result of amendment No. 102, which was supported across the political parties, an amendment in the Bill restricts steeply and properly the fee level that can be charged.
We have reservations about the whole concept of a fee being accepted at all, because there will still be discrimination. Leaseholders will be subject to fees when they try to get justice, whereas people seeking justice from a different tribunal will not be subject to a fee; but amendment No. 102 restricts the fee level to an amount that is similar to the one that could be charged in a county court.
There seems to be a measure of common sense behind that, despite my reservation, because a leaseholder would have the option and alternative of seeking justice in a county court instead of in a leasehold valuation tribunal. The restriction to the fee level chargeable in the county court, which I understand is about £115, is clearly a considerable improvement on the Government's original proposal.
In reaction, the Government have gradually withdrawn from their original position, which I suppose one could describe as the free market position, where the full cost of £2,000 a day could be charged. They are now seeking a limited cost of £500 for a case.
There is, however, an extraordinary inconsistency about the Government's position. Although they say that they are prepared to limit the cost to £500, they are still leaving in the Bill language that refers to the charge being no more than is necessary to cover the costs. The Minister will recognise that that phraseology still remains.
It is not only those of us who have reason to be sceptical about the Government's good intentions who will feel nervous about the fact that, while that phraseology is still there, Ministers have scope to come forward with the powers that they are giving themselves under their amendment and to say, "We need to change this figure. It may have been £500 in 1996, but in 1997 there may be a need to increase it because the cost is greater." No doubt we will be given the statistics and figures showing that the costs are higher and justifying an increase from £500. Therefore, the £500 figure, which is an arbitrary figure for which there is no logical justification, cannot be counted on as the maximum cost that a leaseholder might have to face.
There is still scope in the Bill for the Government to vary that amount by order, and there is provision in the Bill for the fees not to exceed the total cost. That link between the fee and the cost is extremely dangerous, and could lead to proposals to increase the fee. Even if it does not, £500 is a substantial sum, which would seriously deter many leaseholders on low incomes from seeking justice. We have had evidence from many organisations that represent leaseholders highlighting the extent to which people on modest incomes can be intimidated.

Mr. Ashby: The Bill is extremely important for leaseholders on low incomes, such as pensioners, who are being intimidated. It may not matter to young yuppies earning a lot of money, with properties with 999-year leases, but it means a lot to pensioners on fixed low incomes. The fee could seem extremely high to them.

Mr. Raynsford: The hon. Gentleman is absolutely right. It is precisely leaseholders on middle to low incomes who are most likely to be intimidated and most likely to decline to use a leasehold valuation tribunal if they know that it will cost £500, because that sum might be beyond their means.
The Minister may say that the charge relates to service charges that could involve several hundred pounds and that it is therefore worth it, but pensioners budgeting on a tight income and worried about an increase in service charges from, say, £600 to £750 might consider the possible saving of £150 not to be worth arguing about if they must pay £500 in fees to take the case to a leasehold valuation tribunal. Why should they have to pay that fee? Why should not they be able to get affordable justice, given that tribunals normally operate on the principle that people should have access to justice and should not be deterred by a lack of means?
The Minister argued that the fee could be reimbursed if the leasehold valuation tribunal decided that the applicant had a meritorious case and the landlord did not. That might apply in some cases, but no one on a low income who was worried about whether he or she could afford the £500 would take the risk. If such people are worried that they cannot pay, they will not be reassured by the possibility—it is a mere possibility—that, if they are successful, the leasehold valuation tribunal may decide that the fee should be reimbursed.
The Government's proposal is extremely dangerous. It threatens the basis of what we argued for in Committee and thought the Government had accepted—that people on modest incomes should have access to justice without being deterred by the cost. Once again, it raises the spectre of leaseholders intimidated by unscrupulous rogue landlords being unable to get effective redress.
By linking the fees to those charged in a county court, Lords amendment No. 102 provides the Government with a modest fee. Although it is higher than we would want, the amendment limits it to a figure that would be, in almost every case, affordable. Moreover, it makes a proper connection between the fees charged in a leasehold valuation tribunal and those charged in a county court, so there is no possibility of inconsistency in the cost of justice between the two. The amendment passed by the House of Lords was important, as it incorporates the principle of affordable justice, and it deserves to be retained in the Bill.
The Government have been engaged in a retreat. Originally, they proposed large fees; they now propose slightly less onerous fees, but they still seek to impose fees that will deter some people from obtaining justice. They are making a dangerous move, which cuts across the principle that people should have access to justice without having to pay fees through tribunals. Their amendments should therefore be resisted, and I invite my hon. Friends to support Lords amendment No. 102, if necessary, in the Division Lobby.
Conservative Members often speak about the importance of leaseholders' rights. They must decide whether their loyalty lies with leaseholders or with the Government. Their failure to back leaseholders in the past, particularly in crucial votes on Report two months ago, led to the loss of some of the most important rights that we could have given leaseholders. It will be tragic if, tonight, leaseholders are confronted once again by a betrayal of their hopes for affordable justice because Conservative Members, who speak as though they support leaseholders, are not prepared to express that support in the Lobby. We shall press this issue and invite all those who believe that leasehold justice is important to join us in voting to retain the Lords amendment.

Sir John Hunt: The hon. Member for Greenwich (Mr. Raynsford) referred to a "Government retreat". I would prefer to describe it as a sensible concession in response to concerns expressed by hon. Members here and in another place. I suppose that the nature of compromises means that they do not and cannot fully satisfy either side, but I am reasonably happy with the solution that my hon. Friend the Minister has put forward this afternoon in the form of amendment (a).
Originally, there were great fears that fees of £2,000 a day would be imposed. That would have inhibited people from going to leasehold valuation tribunals and would have undermined the point and purpose of such tribunals, which have deservedly been given a warm welcome by leaseholders throughout the country. I welcome the fact that the Government drew back from their original intention to impose full cost-basis fees.
The Government's concession reminds us of the useful role that the other place can play in matters of this kind. Without the debate to which the hon. Member for Greenwich referred, I doubt whether the Government would have made that compromise. I am sure that the concession will be given a qualified welcome by many leaseholders who look at these matters sensibly and realistically. They will not necessarily oppose the principle of levying fees provided that they are moderate and sensible. In many cases, £500 a day would be shared by several leaseholders taking a single case to a tribunal, so the sum would not be punitive.
The concession will be given a qualified welcome by my constituents, such as those who live on the Fair Acres estate, who have been subjected to a great deal of anxiety and harassment by their landlords over the years. I shall therefore support the Government in the Lobby tonight.

Mrs. Maddock: Amendment No. 102 is a classic case of giving with one hand and taking away with the other. We have seen that happen in Committee and throughout the Bill's proceedings in another place.
All hon. Members welcome the fact that leasehold valuation tribunals will assist leaseholders if they have severe problems. However, the tribunals will be of absolutely no use to many people if the cost is too high. In particular, I am concerned about elderly people. They worry about money and the hassle of going to the tribunal. If they are worried about whether they can afford to do so, they will not go to the tribunal.
The matter was extensively discussed in another place and I concur entirely with the comments of my noble Friend Baroness Hamwee on this matter. We are talking about access to justice—free access to justice. The Government have retreated on this matter: there will not be free access to justice, as we all thought at the beginning—there will be costs.
The Government's amendments give Ministers the power to change the limit, although they are trying to convince us that it is £500. That is totally unacceptable. I concur with what was decided in another place. I fully support amendment No. 102, as passed in another place.

Mr. Ashby: The debate has reminded me of something that happened to me some years ago when I was successfully demolishing a prosecution case. The judge was getting more and more irate as he saw the case disappearing and he said to me, "Do you know how much it costs per minute to run this court?" I replied, "I agree that it costs a large amount of money, but what price justice?" Today, we are dealing with justice; we are dealing with something that the Government have recognised and acted on, to their enormous credit.
The Government have appreciated that people go to the London auction houses and see freeholds on 999-year leases being auctioned. We are not talking about the great estates or the decent people—we are talking about people who are out to make a fast buck, about the rip-off merchants. It is no good talking about the sanctity of contracts, about people agreeing that they had a 999-year lease and about people being subject to a contract that they are trying to break. We are talking about rip-off merchants who go out and buy freeholds and then see how much they and their successors can rip off the leaseholder in the following 999 years. I am fundamentally opposed to the whole system, but that is not what we are debating today.
I shall explain to my hon. Friend the Minister why I shall support him in the Lobby today, but I want him to understand what he needs to do in terms of regulation. I declare an interest because I shall talk about my personal case and what I am going to do. I want my hon. Friend to work his regulations so that I can do the best thing possible in my case. That is the best way that I can illustrate what I believe should be done.
My property was sold off to some rip-off merchants, who formed a company called Raleigh Estates, which is really run by a firm of surveyors called Wallakers—


I suspect that it owns a number of properties. It purchased a 999-year lease on a small block of four flats. I am incensed by this behaviour, not because I mind—I earn enough money to pay the insurance—but because it is ripping people off. I loathe being ripped off.
I know that individual flats can be insured for about £180 a year, but that Wallakers has gone to great lengths to ensure that the insurance costs in excess of £390 a year. The terms of the lease say that Wallakers must nominate the insurers and that it is the agent. I believe that the Monopolies and Mergers Commission should look at this matter. There is a tie-up between the major insurance companies and companies such as Wallakers.
The insurance companies do not receive the money direct—they go through Wallakers, and Wallakers gets 15 per cent. I know that 15 per cent. of £180 is not very much, but 15 per cent. of £390 is a good deal more. It is in the interests of the rip-off merchants, such as Wallakers, to get the highest possible insurance they can—they rip us off so that they can get the highest possible return. We have to do something about this.
There are only four flats in my block. One of the tenants is a young computer man and he can afford it. However, one of the tenants is an old-age pensioner. We tried to buy the freehold and had an enormous number of problems. Wallakers puts in every impediment that it can—it does not reply to letters. I have instructed solicitors in this regard, and they cannot get anywhere. Time and time again, we are getting absolutely nowhere. We are all fed up.
The solution is to take the management out of the hands of Wallakers—and as quickly as possible. It will be left with £15 a year and it will have to decide whether it is worth it. We will say, "You can stuff it, Wallakers, we will carry on with the management. You can just get your £15 a year." That is what we want to do.
I want us to get the regulations right. I accept that we must have a limit of £500. The Treasury is giving Departments absolute hell, and I accept that we must have some sort of compromise. Hon. Members have to remember that, in the case that I am talking about, there are not 200 flats—if there are 200 flats, it will be only £5 or £10 a person—but only four, and it costs a lot more.
I hope that the regulations will cover not only the cost of what we are trying to do but the number of applicants. I hope that there can be a scale of fees that will take those factors into account. One should be able to go swiftly, quickly and cheaply before the tribunal. I should like the management to be in my hands—I would get three quotes from insurance companies and I would not charge 15 per cent. There are only four of us and I shall get the others to pay a direct debit to the insurance company and away we will go. There will be no problems at all and no one will be ripped off.
I want my hon. Friend to think about the scale of charges and about the limit of £500. He should also think about the bottom end and grade it according to the number and to the scale—according to what is required and what is requested. There are a number of ways of getting it right. I accept that things will change. After all, £500 is a reasonable sum of money today but, in 20 years time—especially if the Labour party gets into power and causes

inflation to rise—it will seem like only £5. I accept that there will have to be some change in the years ahead to take account of inflation, if nothing else.
In keeping with everything that we have said, I am sure that my hon. Friend's Department will honour the spirit that it is £500 today and that it may have to be changed in the years ahead. We need justice that is cheap and swift. We need justice in this matter.

Mr. Dudley Fishburn: The story of leasehold reform is a strange one, and this set of amendments most perfectly typifies what is so strange about it. The push for leasehold reform has come from Conservative voters, home owners and a million people who have sunk a lot of money into their homes and found that their homes, under our leasehold system, are second-class homes.
Despite the charming words of the hon. Member for Greenwich (Mr. Raynsford), the articulateness of the leasehold reform campaign has been provided by Conservative Members, who enabled the previous three Leasehold (Reform) Acts to be passed.

Mr. Raynsford: The hon. Gentleman argues that the case for leasehold reform has been made by Conservative Members. Perhaps he will tell the House who voted for leaseholders' right to manage and to do away with the low-rent test, and why he voted with the Government and with all his Conservative colleagues against leaseholders' interests on those two issues?

Mr. Fishburn: I did not mean to stir up this pot at this time. I divided the House on the low-rent test, and I voted with the hon. Member for Greenwich on the most recent Leasehold (Reform) Bill—which gets to the point that I should like to make. While leasehold reform is in the Conservative interest, and Conservative Members have articulated that interest, often the Government have been the slowest, most reluctant and most diluted in their approach to it.
The amendments are to be hugely welcomed, as are the concessions that have been gained. However, they should have been in an Act of two years ago. We were told then, of course, that it was completely impossible for leaseholders to have access to the right to manage, in the same way that we were told that the low-rent test was an essential part of leasehold law. Now, courtesy of the good work done by the Government, that low-rent test has been all but abolished, and leaseholders will have a right to go to a leasehold valuation tribunal to win the ability to manage. However, it is little, it is late, and it is not the last word on the subject.
What is certain is that the topics that we have been discussing as the Bill has passed through the House, and most particularly this set of amendments, will be revisited in the years ahead. That has nothing to do with the ambitions of the hon. Member for Greenwich—who, if ever he does come to the Dispatch Box, will probably come to it as an Agriculture Minister rather than as a Minister for anything to do with the Department of the


Environment—but it has everything to do with the slow, reluctant and rather muddled way in which we revise property law in this country.
My guess is that the amendments will return in another Housing Bill, that the Bill is by no means the last word and that, in 2010, leaseholders will not be going to a leasehold valuation tribunal, paying their £500 and winning the right to manage.
I am delighted that the concessions have been made, that a cap has been established and that Front Benchers have—although it is little and late—done the right thing. As one more step along the path of proper leasehold reform, the measures are much to be welcomed.

Mr. Clappison: I think that hon. Members are familiar with the background of how some tenants have suffered at the hands of certain landlords. Certainly we believe that our package of reforms will be of real assistance to many tenants who have suffered in that manner. This reform—the establishment of the leasehold valuation tribunal—will be an important part of that package.
The hon. Member for Greenwich (Mr. Raynsford) raised the issue of unscrupulous landlords who would try to exploit the provisions in the same way in which they have exploited other provisions, causing fear and trepidation for tenants. I should tell him that the provision to which I referred in my opening remarks is perhaps one that the courts will want to consider, particularly in the context of landlords' behaviour. We have set out a provision that allows a tribunal to require the other party to reimburse the applicant for all or part of the fee if it seems appropriate in the circumstances. There is no doubt that tribunals will want to examine carefully the type of behaviour by landlords that he mentioned.
The hon. Member for Greenwich, and the hon. Member for Christchurch (Mrs. Maddock), mentioned the order and the possibility of increasing the sum of £500. I respectfully draw their attention to the fact that that would require an affirmative resolution and to what I have already said about that matter—that the order will be dealt with in the normal way and that it will occasionally reflect changes in cost. It is sensible to have such a provision for change. It does not mean necessarily that change will be brought in tomorrow, but it is sensible to have such provision for it.
Various hon. Members have mentioned people on low incomes. The Bill contains provision for the tribunal to mitigate the fee if the applicant is on a low income. We have not yet decided how to implement that provision in detail, but we shall be consulting on it. I can tell the House that it is likely that we will passport the current support regime—such as income support—as a basis for the operation of that mitigation. The fee will be mitigated in full or in part if the applicant qualifies.
I am grateful to my hon. Friend the Member for Ravensbourne (Sir J. Hunt) for his expression of support—which, in his case, comes after a very careful consideration of the provisions.
I am grateful to my hon. Friend the Member for Kensington (Mr. Fishburn). It is fair to say, on any view, that he has played a most distinguished and well-documented part in the history of leasehold reform.
I listened carefully to the comments of my hon. Friend the Member for North-West Leicestershire (Mr. Ashby), who I know cares deeply about this subject. He put it admirably when he said that justice in such circumstances should come swiftly and cheaply. In response to his concern, I can tell him that the precise fee structure has not yet been worked out. We will, however, of course be guided by the type of considerations to which I have already adverted. He is as anxious as we are that we should have effective justice at an affordable price. We believe that these provisions will achieve that.

Lords amendment agreed to.

Lords amendment Nos. 100 and 101 agreed to.

Lords amendment: No. 102, in page 53, line 36, leave out from ("securing") to end of line 39 and insert
("that the amount of the fees charged is no more than would, in the opinion of the Secretary of State, be chargeable for similar proceedings in the county court.")

Motion made, and Question proposed, That this House doth disagree with the Lords in the said amendment.—[Mr. Clappison.]

Question put:—

The House divided: Ayes 265, Noes 217.

Division No. 207]
[5.36 pm


AYES


Ainsworth, Peter (E Surrey)
Chapman, Sir Sydney


Alison, Michael (Selby)
Clappison, James


Allason, Rupert (Torbay)
Clark, Dr Michael (Rochf'd)


Amess, David
Clarke, Kenneth (Rushcliffe)


Arbuthnot, James
Clifton-Brown, Geoffrey


Arnold, Jacques (Gravesham)
Coe, Sebastian


Ashby, David
Congdon, David


Atkins, Robert
Coombs, Anthony (Wyre F)


Atkinson, Peter (Hexham)
Coombs, Simon (Swindon)


Baker, Nicholas (N Dorset)
Cope, Sir John


Baldry, Tony
Cormack, Sir Patrick


Banks, Matthew (Southport)
Couchman, James


Banks, Robert (Harrogate)
Cran, James


Bates, Michael
Currie, Mrs Edwina


Batiste, Spencer
Curry, David


Bellingham, Henry
Davies, Quentin (Stamf'd)


Bendall, Vivian
Deva, Nirj Joseph


Beresford, Sir Paul
Devlin, Tim


Biffen, John
Dorrell, Stephen


Body, Sir Richard
Douglas-Hamilton, Lord James


Bonsor, Sir Nicholas
Dover, Den


Booth, Hartley
Duncan, Alan


Boswell, Tim
Duncan Smith, lain


Bottomley, Peter (Eltham)
Dunn, Bob


Bowden, Sir Andrew
Durant, Sir Anthony


Bowis, John
Dykes, Hugh


Boyson, Sir Rhodes
Elletson, Harold


Brandreth, Gyles
Evans, Nigel (Ribble V)


Brazier, Julian
Evans, Roger (Monmouth)


Bright, Sir Graham
Evennett, David


Brooke, Peter
Fabricant, Michael


Brown, Michael (Brigg Cl'thorpes)
Fenner, Dame Peggy


Browning, Mrs Angela
Field, Barry (Isle of Wight)


Bruce, Ian (S Dorset)
Fishburn, Dudley


Bums, Simon
Forman, Nigel


Burt, Alistair
Forsyth, Michael (Stirling)


Butcher, John
Forth, Eric


Butler, Peter
Fowler, Sir Norman


Carlisle, John (Luton N)
Fox, Dr Liam (Woodspring)


Carlisle, Sir Kenneth (Linc'n)
Fox, Sir Marcus (Shipley)


Carrington, Matthew
Freeman, Roger


Carttiss, Michael
French, Douglas


Cash, William
Fry, Sir Peter


Channon, Paul
Gale, Roger






Gallie, Phil
Marshall, Sir Michael (Arundel)


Gardiner, Sir George
Martin, David (Portsmouth S)


Garnier, Edward
Mawhinney, Dr Brian


Gill, Christopher
Merchant, Piers


Gillan, Mrs Cheryl
Mills, lain


Goodlad, Alastair
Mitchell, Andrew (Gedling)


Goodson-Wickes, Dr Charles
Mitchell, Sir David (NW Hants)


Gorman, Mrs Teresa
Moate, Sir Roger


Gorst, Sir John
Monro, Sir Hector


Grant, Sir Anthony (SW Cambs)
Montgomery, Sir Fergus


Greenway, Harry (Ealing N)
Needham, Richard


Greenway, John (Ryedale)
Nelson, Anthony


Griffiths, Peter (Portsmouth N)
Newton, Tony


Gummer, John
Nicholls, Patrick


Hamilton, Sir Archibald
Norris, Steve


Hamilton, Neil (Tatton)
Oppenheim, Phillip


Hampson, Dr Keith
Ottaway, Richard


Hanley, Jeremy
Paice, James


Hannam, Sir John
Patnick, Sir Irvine


Hargreaves, Andrew
Patten, John


Haselhurst, Sir Alan
Pattie, Sir Geoffrey


Hawkins, Nick
Pawsey, James


Hawksley, Warren
Peacock, Mrs Elizabeth


Hayes, Jerry
Pickles, Eric


Heald, Oliver
Porter, David (Waveney)


Heathcoat-Amory, David
Portillo, Michael


Hendry, Charles
Powell, William (Corby)


Heseltine, Michael
Rathbone, Tim


Higgins, Sir Terence
Redwood, John


Hill, Sir James (Southampton Test)
Riddick, Graham


Horam, John
Rifkind, Malcolm


Hordem, Sir Peter
Robathan, Andrew


Howard, Michael
Roberts, Sir Wyn


Howell, Sir Ralph (N Norfolk)
Robertson, Raymond S (Ab'd'n S)


Hughes, Robert G (Harrow W)
Robinson, Mark (Somerton)


Hunt, David (Winal W)
Roe, Mrs Marion


Hunt, Sir John (Ravensb'ne)
Rowe, Andrew


Hunter, Andrew
Rumbold, Dame Angela


Hurd, Douglas
Sackville, Tom


Jack, Michael
Sainsbury, Sir Timothy


Jackson, Robert (Wantage)
Scott, Sir Nicholas


Jenkin, Bernard (Colchester N)
Shaw, David (Dover)


Jessel, Toby
Shaw, Sir Giles (Pudsey)


Johnson Smith, Sir Geoffrey
Shephard, Gillian


Jones, Gwilym (Cardiff N)
Shepherd, Sir Colin (Heref'd)


Jones, Robert B (W Herts)
Shersby, Sir Michael


Jopling, Michael
Sims, Sir Roger


Key, Robert
Skeet, Sir Trevor


King, Tom
Smith, Tim (Beaconsf'ld)


Knight, Mrs Angela (Erewash)
Soames, Nicholas


Knight, Greg (Derby N)
Speed, Sir Keith


Knight, Dame Jill (Edgbaston)
Spencer, Sir Derek


Knox, Sir David
Spicer, Sir Jim (W Dorset)


Kynoch, George
Spteer, Sir Michael (S Worcs)


Lait, Mrs Jacqui
Spink, Dr Robert


Lang, Ian
Spring, Richard


Lawrence, Sir Ivan
Sproat, Iain


Legg, Barry
Squire, Robin (Hornchurch)


Lennox—Boyd, Sir Mark
Stanley, Sir John


Lester, Sir Jim (Broxtowe)
Steen, Anthony


Lidington, David
Stephen, Michael


Lilley, Peter
Stewart, Allan


Lloyd, Sir Peter (Fareham)
Streeter, Gary


Lord, Michael
Sumberg, David


Luff, Peter
Sweeney, Walter


Lyell, Sir Nicholas
Sykes, John


MacGregor, John
Tapsell, Sir Peter


MacKay, Andrew
Taylor, Ian (Esher)


Maclean, David
Taylor, John M (Solihull)


Madel, Sir David
Taylor, Sir Teddy


Maitland, Lady Olga
Thomason, Roy


Malone, Gerald
Thompson, Sir Donald (Calder V)


Mans, Keith
Thompson, Patrick (Norwich N)


Marland, Paul
Thumham, Peter


Marlow, Tony
Townend, John (Bridlington)


Marshall, John (Hendon S)
Townsend, Cyril D (Bexl'yh'th)





Tracey, Richard
Whitney, Ray


Tredinnick, David
Whittingdale, John


Trend, Michael
Widdecombe, Miss Ann


Twinn, Dr Ian
Wiggin, Sir Jerry


Vaughan, Sir Gerard
Wilkinson, John


Waldegrave, William
Willetts, David


Walden, George
Wilshire, David


Walker, Bill (N Tayside)
Wolfson, Mark


Waller, Gary
Wood, Timothy


Ward, John
Yeo.Tim


Wardle, Charles (Bexhill)
Young, Sir George


Waterson, Nigel
Tellers for the Ayes:


Watts, John
Mr. Derek Conway and Mr. Patrick McLoughlin.


Wells, Bowen





NOES


Abbott, Ms Diane
Davis, Terry (B'ham Hodge H)


Ainger, Nick
Dewar, Donald


Ainsworth, Robert (Cov'try NE)
Dixon, Don


Allen, Graham
Dobson, Frank


Alton, David
Dowd, Jim


Anderson, Donald (Swansea E)
Dunwoody, Mrs Gwyneth


Anderson, Ms Janet (Ros'dale)
Eagle, Ms Angela


Armstrong, Ms Hilary
Eastham, Ken


Ashton, Joseph
Etherington, Bill


Austin-Walker, John
Evans, John (St Helens N)


Barnes, Harry
Fatchett, Derek


Barron, Kevin
Faulds, Andrew


Battle, John
Field, Frank (Birkenhead)


Beckett, Margaret
Fisher, Mark


Berth, A J
Flynn, Paul


Bell, Stuart
Foster, Derek


Benn, Tony
Foster, Don (Bath)


Bennett, Andrew F
Foulkes, George


Benton, Joe
Fraser, John


Bermingham, Gerald
Fyfe, Mrs Maria


Berry, Roger
Galloway, George


Betts, Clive
Gapes, Mike


Blair, Tony
Garrett, John


Bradley, Keith
Gilbert, Dr John


Bray, Dr Jeremy
Godman, Dr Norman A


Brown, Gordon (Dunfermline E)
Godsiff, Roger


Brown, Nicholas (Newcastle E)
Golding, Mrs Lin


Bruce, Malcolm (Gordon)
Gordon, Ms Mildred


Byers, Stephen
Grant, Bemie (Tottenham)


Caborn, Richard
Griffiths, Win (Bridgend)


Callaghan, Jim
Grocott, Bruce


Campbell, Mrs Anne (C'bridge)
Hall, Mike


Campbell, Menzies (Fife NE)
Hanson, David


Campbell, Ronnie (Blyth V)
Hardy, Peter


Campbell-Savours, D N
Harman, Ms Harriet


Canavan, Dennis
Harvey, Nick


Cann, Jamie
Hattersley, Roy


Chisholm, Malcolm
Henderson, Doug


Church, Ms Judith
Heppell, John


Clapham, Michael
Hill, Keith (Streatham)


Clark, Dr David (S Shields)
Hinchliffe, David


Clarke, Tom (Monklands W)
Hoey, Miss Kate


Clelland, David
Hoon, Geoffrey


Clwyd, Mrs Ann
Howarth, Alan (Stratf'd-on-A)


Coffey, Ms Ann
Howarth, George (Knowsley N)


Cohen, Harry
Howells, Dr Kim


Connarty, Michael
Hoyle, Doug


Cook, Frank (Stockton N)
Hughes, Kevin (Doncaster N)


Cook, Robin (Livingston)
Hughes, Robert (Ab'd'n N)


Corbyn, Jeremy
Hutton, John


Corston, Ms Jean
Jackson, Ms Glenda (Hampst'd)


Cousins, Jim
Jackson, Mrs Helen (Hillsborough)


Cox, Tom
Jamieson, David


Cunningham, Jim (Cov'try SE)
Jenkins, Brian (SE Staffs)


Cunningham, Dr John
Johnston, Sir Russell


Dafis, Cynog
Jones, Barry (Alyn &amp; D'side)


Dalyell, Tam
Jones, Nigel (Cheltenham)


Darling, Alistair
Jowell, Ms Tessa


Davies, Denzil (Uanelli)
Kaufman, Gerald






Keen, Alan
Prescott, John


Kennedy, Mrs Jane (Broadgreen)
Primarolo, Ms Dawn


Khabra, Piara S
Quin, Ms Joyce


Kilfoyle, Peter
Radice, Giles


Kirkwood, Archy
Randall, Stuart


Lestor, Miss Joan (Eccles)
Raynsford, Nick


Livingstone, Ken
Reid, Dr John


Lloyd, Tony (Stretf'd)
Rendel, David


Lynne, Ms Liz
Robertson, George (Hamilton)


McAllion, John
Roche, Mrs Barbara


McAvoy, Thomas
Rogers, Allan


McCartney, Ian (Makerf'ld)
Rooker, Jeff


Macdonald, Calum
Rooney, Terry


McFall, John
Ross, Emie (Dundee W)


McKelvey, William
Ruddock, Ms Joan


Mackinlay, Andrew
Sedgemore, Brian


McLeish, Henry
Sheerman, Barry


McMaster, Gordon
Shore, Peter


McNamara, Kevin
Short, Ms Clare


MacShane, Denis
Skinner, Dennis


Madden, Max
Smith, Andrew (Oxford E)


Maddock, Mrs Diana
Smith, Llew (Blaenau Gwent)


Mahon, Mrs Alice
Smyth, Rev Martin (Belfast S)


Marshall, David (Shettleston)
Spearing, Nigel


Martin, Michael J (Springbum)
Spellar, John


Meacher, Michael
Steinberg, Gerry


Meale, Alan
Stevenson, George


Michael, Alun
Stott, Roger


Michie, Bill (Shef'ld Heeley)
Strang, Dr Gavin


Miller, Andrew
Straw, Jack


Mitchell, Austin (Gt Grimsby)
Sutcliffe, Gerry


Molyneaux, Sir James
Taylor, Mrs Ann (Dewsbury)


Moonie, Dr Lewis
Taylor, Matthew (Truro)


Morgan, Rhodri
Thompson, Jack (Wansbeck)


Morris, Alfred (Wy'nshawe)
Timms, Stephen


Morris, Ms Estelle (B'ham Yardley)
Tipping, Paddy


Mowlam, Ms Marjorie
Touhig, Don


Mudie, George
Trickett, Jon


Mullin, Chris
Tyler, Paul


Murphy, Paul
Vaz, Keith


Nicholson, Miss Emma (W Devon)
Walker, Sir Harold


O'Brien, William (Normanton)
Wareing, Robert N


Olner, Bill
Watson, Mike


Orme, Stanley
Wicks, Malcolm


Pearson, Ian
Williams, Alan (Swansea W)


Pendry, Tom
Williams, Alan W (Carmarthen)


Pickthall, Colin
Winnick, David


Pike, Peter L
Wise, Mrs Audrey


Pope, Greg
Tellers for the Noes:


Prentice, Mrs B (Lewisham E)
Mr. Eric Clarke and Mr. Eric Martlew.


Prentice, Gordon (Pendle)

Question accordingly agreed to.

Amendments made in lieu of the Lords amendment: (a), in page 53, line 35, leave out from first 'order' to end of line 39 and insert—
'subject to this limit, that the fees payable in respect of any one application or reference by the court together with any proceedings before the tribunal arising out of that application or reference shall not exceed £500 or such other amount as may be specified by order of the Secretary of State.'.

(b), in page 54, line 6, leave out 'which, unless the order' and insert—
'( )No order altering the limit under subsection (3) shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
( ) Any other order under this section, unless it'.—[Mr. Brandreth.]

Lords amendments Nos. 103 and 104 agreed to.

Clause 81

APPOINTMENT OF MANAGER

Lords amendment: No. 105, in page 55, line 29, after ("made)") insert
(", in paragraph (a) (breach of obligation by landlord), omit sub—paragraph (ii) (requirement that circumstances likely to continue).
( ) In that subsection,")

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 106 to 113, Lords amendment No. 114, Government amendments (b) and (c) and Opposition amendment (a) in lieu thereof, Lords amendments Nos. 278 to 285, Lords amendment No. 286 and Government amendments (a) and (b) in lieu thereof.

Mr. Clappison: We now come to a group of amendments that deal with applications to the leasehold valuation tribunal for the appointment of a manager. At the appropriate time, I shall ask the House to disagree with Lords amendment No. 114 and Opposition amendment (a) in lieu thereof.
These amendments make a number of changes to clauses 81 and 82 and to schedule 5, which establish the right of a tenant of a flat to apply to a leasehold valuation tribunal for the appointment of a manager on the ground that the landlord is in some way falling short in his management responsibilities.
Amendments Nos. 105 and 279 concern the grounds for appointing a manager set out in the existing legislation: that the landlord is in breach of his obligations under the lease and that this breach is likely to continue. The amendment deletes the second part. Also, under the two additional grounds introduced by clause 81, there is no express requirement for the tribunal to take account of the likely future behaviour of the landlord. This amendment therefore ensures a degree of consistency between the three grounds which the tribunal will have to consider and, most importantly, should improve the chances of tenants succeeding in cases where a history of bad management can be demonstrated.
Amendments Nos. 112 and 285 restrict the right of appeal from an LVT to the lands tribunal in cases for the appointment of a manager, by requiring that leave to appeal must be first obtained from either the LVT or the lands tribunal. An appeal will be possible only with the approval of either tribunal. That parallels the appeal procedures that we have introduced in relation to the new jurisdiction contained in clause 79 for leasehold valuation tribunals to determine the reasonableness of service charges.
Amendment No. 108 would require the LVT, when considering an application from a landlord for an order appointing a manager to be discharged, to be satisfied that the variation or discharge would not lead to a recurrence of the problems which led to the making of the original order and that it is just and convenient in all the circumstances of the case to vary or discharge the order.
I intend to ask the House to support Government amendments (b) and (c) in lieu of Lords amendment No. 114; Lords amendment No. 286 and Government amendments (a) and (b) in lieu thereof, and to resist Lords


amendment No. 114 and Opposition amendment (a) in lieu thereof. In effect, the issues here are very similar to those we have just discussed in relation to the level of fees chargeable by the tribunal for dealing with service charge disputes.
The new jurisdiction given to the LVT to consider applications by leaseholders for the appointment of an independent manager will run in parallel. This is an important new right for leaseholders to secure the efficient management of their homes, and it offers them a respite from an unsatisfactory or oppressive landlord. We have modified and strengthened the grounds that the LVT can consider when deciding whether a new manager should be appointed, and we have made it more difficult for the old landlord to come back and simply ask for another chance to do the job properly, without demonstrating clearly to the tribunal that he has mended his ways.
The current position in the Bill on fees for these cases is not the same as for the service charge procedures. A Government amendment on Third Reading in another place was accepted, so the Bill currently states that the level of fees must not exceed the cost of providing the service. As I said earlier, this gives the Government considerable flexibility in setting an adequate fee structure, but there is a very strong argument for establishing a maximum limit of £500 in each case, in exactly the same manner as for the service charge procedures. We will then adopt a closely parallel fee structure for the two procedures, which will be of great benefit in helping leaseholders to understand what is involved and in deciding which procedure would be most suitable for them.
For the same reasons as I gave at length in relation to the previous group of amendments, I cannot accept the Opposition's amendment, which would establish a very low maximum level of fee of about £120. The issues are similar. I believe that we have struck the right balance to provide for effective justice for tenants at an affordable price.

Mr. Raynsford: We have before us very clear evidence of the problems caused by large-scale alterations to Bills at the last possible moment. Substantial amendments were made on Third Reading in the other place last Wednesday. Amendments and starred amendments have been tabled, with Government manuscript amendments being submitted only today because, at the last minute, the Government realised that there was an inconsistency between what they are doing in one part of the Bill and what they are doing in another.
Before we get to the substance of this debate, I must tell the Minister that this is no way to proceed with a crucial issue such as leasehold reform. Once again, last-minute changes are being made in a hurry without proper time to consider them and without opportunity for proper scrutiny. I say clearly tonight that this will not be the last word. The hon. Member for Kensington (Mr. Fishburn) said the same in the previous debate. This cannot be the final word on leasehold reform. We will need to return to the issue, because the Bill goes only some way towards resolving the problems, and does even that in an inherently unsatisfactory way.
Through this series of amendments, we are dealing with the whole issue of the management of leasehold blocks. We are considering the problems faced by leaseholders

who have incompetent or, frankly, unscrupulous and dishonest landlords. We know of examples of landlords who have failed to do the things that they ought to have done and who have not maintained their blocks properly. Often, that has been because of incompetence—but we also know of a new breed of rogue landlords who have been determined to abuse their privileges and use their powers as freeholders to intimidate and extort more money from their leaseholders than they should pay for various charges. It is to provide redress against incompetence on the one side and dishonesty and extortion on the other that new measures are required to give leaseholders rights and to prevent landlords from abusing the system.
When the matter was debated in Committee, thoroughly and in detail, the Committee rightly voted for a simple and effective remedy: the right to manage. That remedy was advocated by the Labour party in its policy paper on leasehold reform issues, "An End to Feudalism", as the simplest and most effective way of giving leaseholders proper redress and ensuring that, if confronted with an incompetent or dishonest landlord, they could take matters into their own hands and take over management of the block, thereby ending the abuse.
6 pm
That right to manage mirrors an equivalent right that the Government have given to council tenants. It is a clear, simple, straightforward mechanism, and it would have been the right solution. It is common sense that those who have the greatest interest in the future management of a property—the leaseholders—should themselves be able to take on the responsibility if they feel that they can discharge it better than the freeholder. The remedy is effective, because it sends unscrupulous landlords a clear message that, if they fail to provide a good service, the leaseholders will be able to take over management; but it is not against the interests of good landlords.
Along with others, I have made that point on many occasions. There is no threat to the good landlord who does not exploit tenants, and charges a reasonable amount for services. In such circumstances, leaseholders would not want to take over management, because they would not be able to make any savings or provide a more efficient service. Equally, given the way in which the right to manage was proposed, it would have provided a proper safeguard for landlords' interests by ensuring their representation on the management company.
Despite all those strong arguments in favour of a right to manage, however, the Government chose on Report to vote down the proposal, albeit by a narrow margin. We have now been presented with the alternative—which is very much a second best—of an opportunity for leaseholders to seek redress by means of a leasehold valuation tribunal. The earlier arrangement laid down in the Landlord and Tenant Act 1987, allowing leaseholders to seek redress through the courts, has proved entirely ineffective. It has not enabled leaseholders to get rid of unscrupulous or incompetent landlords; the number of cases in which leaseholders have obtained orders to change the management of their blocks has been derisory.
This procedure depends on leaseholders' having to demonstrate fault. That will cause difficulties: it is not the simple, clear-cut procedure that applies when leaseholders say that they wish to take over the management of a


property because they are confident that they can manage it better than the freeholder. They will have to present a case, and demonstrate that the landlord has been at fault. It will be difficult to prove fault, and there will be opportunities for unscrupulous landlords—often aided and abetted by crafty lawyers—to try to get around the provisions. This will not be a satisfactory alternative; moreover, the issue of costs will arise again.
We have discussed that issue in previous debates, and I will not detain the House by repeating the arguments at length. Suffice it to say that a leaseholder with a bad landlord who is not managing the property decently will be nervous about seeking redress through the leasehold valuation tribunal if the cost will be a £500 fee, with no guarantee of reimbursement. The same deterrent will apply as in the case of service charge disputes, which we debated earlier.
We are dealing with a serious problem, which requires a proper, long-term solution. The Government are offering only a limited and partial response, which is typical of their approach to leasehold reform. While they, and Conservative Back Benchers, are only too happy to protest their support for leaseholders and to say that they favour leasehold reform, when it comes to the crunch they repeatedly vote for measures that do not provide leaseholders with proper and effective remedies. On Report, when we had the opportunity to keep the right to manage in the Bill, all the Conservative Members who had spoken so passionately about leaseholders' interests voted with the Government to destroy that right. That is an indication of the extent to which the Conservative party has betrayed leaseholders' interests.
The truth is that the Tory party is still financially dependent on a number of large landowners. Those landowners may not attend meetings of the Premier Club. They probably do not need to: they already have close lines of communication with the party which are, as it were, paved with gold, or at least with financial donations. It is because of its dependence on the money of the big landowners that the Conservative party has consistently failed to defend leaseholders' interests, and has consistently shilly-shallied, and backed away from thorough-going reform. We are seeing the same process tonight: a failure to accept the need for effective, cheap remedies—for justice that is simple, straightforward and inexpensive. Instead, we are being offered a complicated and less than satisfactory alternative, for which leaseholders will have to pay more than they can afford in many cases.
I invite all hon. Members who really care about leasehold reform to join us in the Lobby to support the principle of genuine reform, and to fight properly for the interests of leaseholders.

Mr. Peter Brooke: I listened with pleasure to the point of order raised by the hon. Member for Greenwich (Mr. Raynsford) before we got down to the substance of the Lords amendments. I smiled, because I remembered how often the hon. Gentleman had congratulated the Government in Committee on the manner in which they had responded to arguments, and had said how much the Bill was being improved by our actions. I even remember the hon. Member for Christchurch (Mrs. Maddock) deriving enormous pleasure from the first concession made to her by my right hon. Friend the Minister for Local Government, Housing and Urban Regeneration.
I felt some sympathy with the hon. Member for Greenwich in regard to what we were having to cope with today, and thought that he put his point with a degree of charm. He spoke with pride, however, about the behaviour of members of his party and its Governments in connection with leasehold reform. I have represented my constituency since 1977. The leasehold reform legislation passed before then was passed under the auspices of Labour Governments, and the hon. Gentleman deludes himself if he thinks that those Governments did not leave problems behind, with which leaseholders had to wrestle following 1967 and 1974.
A moment ago, the hon. Gentleman launched an implicit attack on the principle of amendments made on Third Reading in the House of Lords. We fully understand that, were the country to be unwise enough to elect a Labour Government, the constitution would be turned upside down; but I personally consider amendments on Third Reading in the House of Lords to be one of the glories of the constitution. They enable us to make corrections to Bills at the last possible moment, although, on the ping-pong principle, they will return to this House thereafter. I remember that, back in the early days of the 1979 Administration, an amendment on Third Reading to another DOE Bill, which was of immense importance to my constituents, was agreed to. I would be very sorry if such a device disappeared.
We heard the familiar inveighing of the hon. Member for Greenwich against landowners and their relationships with my party. I referred to it as proto-marxist theory in Committee and I am perfectly happy to do so again. He sought to be disarming in Committee and to say that the Labour party's views had no wider implications for property law or contract law. All I can say is that we will listen to that in future.
I have sympathy for the hon. Member for Greenwich on one point: the process through which we have all necessarily been put as a result of the manner in which the Bill has proceeded. I would welcome a response from my hon. Friend the Minister on it. It relates simply to the Royal Institute of Chartered Surveyors' code, which was alluded to at an earlier stage as being what would inform the conduct of the leasehold valuation tribunal in considering applications for the right to manage.
My hon. Friend has drawn attention to the fact that there will be a surveyor on the tribunal who will be able to judge the appropriate law and conditions relating to the matters. When we discussed the matters before, the code was very much in draft form and was being discussed with interested parties. Some assurance was given that its final form would either be available before the Bill completed its passage through the House or fairly soon afterwards. I understand that, as a statutory instrument, it is likely to be available fairly soon afterwards.
I make not a complaint but a point, which is in line with the views expressed by the hon. Member for Greenwich. Leaseholders have been in touch with me to ask whether I have seen the code, think it is satisfactory, or agree that it is unsatisfactory. I inquired at the only place where one can inquire—the RICS. It properly says that, because the document is in draft form, it is being discussed with interested parties and is not available to Members of Parliament.
We therefore find ourselves in the slightly ironical position that, in order for the DOE to come to a conclusion on whether the code—and thus the statutory


instrument—should be recommended to Ministers, leaseholders are allowed access to it and may hold views on it, but Members of Parliament who represent those leaseholders have no idea what it contains. Although I do not blame the RICS for regarding the draft code as a privileged document that should not be available to us, it is an unsatisfactory element in the evolution of policy that we shall eventually be asked to vote on a document that we cannot amend, when there might have been a better way in which to conduct consultation at an earlier stage.

Mr. Clappison: With the leave of the House, I should like to reply to the debate.
This has been an interesting short debate. I emphasise to the hon. Member for Greenwich (Mr. Raynsford) that we come to the problem from a common background. The concern among Conservative Members on behalf of leaseholders is no less than he expressed. We certainly recognise the problems that some leaseholders have experienced as a result of the behaviour of certain landlords. My hon. Friend the Member for North-West Leicestershire (Mr. Ashby) has spoken eloquently on the subject. The package of reforms that we have introduced, including these amendments, targets the problems caused by bad landlords. That is as true of the provisions that we make for the right to manage when there has been bad practice by landlords as it is with the other provisions that we have introduced.
I do not want to go over the wider ground of the right to manage, but I take issue with the hon. Member for Greenwich on what he said about leaseholders. We believe that the amendments will be of real benefit to leaseholders who seek the right to manage as a result of bad practice by landlords. It is no use saying that leaseholders who do not have problems with their landlords will not want to take advantage of such provisions, or, indeed, of a general right to manage such as that postulated by the hon. Gentleman.
We are concerned about leaseholders who we know are experiencing bad practice, unreasonable behaviour, poor standards of maintenance, unreasonable service charges and all the rest. The amendments will give such leaseholders the opportunity to seek the right to manage by challenging what the landlord has done. We do not believe that it will be as difficult as the hon. Member for Greenwich envisages for them to prove that the landlord is at fault. We think that the courts will want to consider the sort of circumstances that we have described and base a finding of fault on them.
6.15 pm
My right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke), who has played a most constructive role in Committee and speaks with great knowledge and authority on the subject, raised the important issue of the Royal Institute of Chartered Surveyors code. I can tell him that the code is in the final stage of completion and it is hoped that my right hon. Friend the Secretary of State will approve it shortly. It has previously been the subject of consultation, and I understand that the RICS has consulted the DOE on it and on its timing.
I shall certainly take up the important point made by my right hon. Friend the Member for City of London and Westminster, South about privilege and, access of Members of Parliament to the code. He spoke with great authority and clarity on the subject, as he did on the way in which the House must consider the amendments. He was absolutely right to emphasise the way in which we have approached the matter.
It is rather difficult to listen to debates and to try to respond to meritorious arguments and then be chastised for making changes in the light of such debates. We have taken such a course throughout the proceedings and think that it has borne fruit. The amendments will be an important benefit for tenants who seek the right to manage when they have suffered at the hands of bad landlords.

Lords amendment agreed to.

Lords amendments Nos. 106 to 113 agreed to.

Lords amendment: No. 114, in page 57, line 35, leave out ("is sufficient to meet") and insert ("does not exceed")

Motion made, and Question put, That this House doth disagree with the Lords in the said amendment.—[Mr. Brandreth.]

The House divided: Ayes 261, Noes 227.

Division No. 208]
[6.16 pm


AYES


Ainsworth, Peter (E Surrey)
Clappison, James


Alison, Michael (Selby)
Clark, Dr Michael (Rochf'd)


Allason, Rupert (Torbay)
Clarke, Kenneth (Rushcliffe)


Amess, David
Clifton-Brown, Geoffrey


Arbuthnot, James
Coe, Sebastian


Arnold, Jacques (Gravesham)
Congdon, David


Ashby, David
Conway, Derek


Atkins, Robert
Coombs, Anthony (Wyre F)


Atkinson, Peter (Hexham)
Coombs, Simon (Swindon)


Baker, Nicholas (N Dorset)
Cope, Sir John


Baldry, Tony
Cormack, Sir Patrick


Banks, Matthew (Southport)
Couchman, James


Banks, Robert (Harrogate)
Cran, James


Bates, Michael
Currie, Mrs Edwina


Batiste, Spencer
Curry, David


Bellingham, Henry
Davies, Quentin (Stamf'd)


Bendall, Vivian
Deva, Nirj Joseph


Beresford, Sir Paul
Devlin, Tim


Biffen, John
Dorrell, Stephen


Body, Sir Richard
Douglas-Hamilton, Lord James


Bonsor, Sir Nicholas
Dover, Den


Booth, Hartley
Duncan, Alan


Boswell, Tim
Duncan Smith, lain


Bottomley, Peter (Eltham)
Dunn, Bob


Bowden, Sir Andrew
Durant, Sir Anthony


Bowis, John
Dykes, Hugh


Boyson, Sir Rhodes
Elletson, Harold


Brandreth, Gyles
Evans, Nigel (Ribble V)


Brazier, Julian
Evans, Roger (Monmouth)


Bright, Sir Graham
Evennett, David


Brooke, Peter
Fabricant, Michael


Brown, Michael (Brigg Cl'thorpes)
Fenner, Dame Peggy


Browning, Mrs Angela
Field, Barry (isle of Wight)


Bruce, Ian (S Dorset)
Fishburn, Dudley


Burns, Simon
Forman, Nigel


Burt, Alistair
Forsyth, Michael (Stirling)


Butcher, John
Forth, Eric


Butler, Peter
Fowler, Sir Norman


Carlisle, John (Luton N)
Fox, Dr Liam (Woodspring)


Carlisle, Sir Kenneth (Linc'n)
Fox, Sir Marcus (Shipley)


Carrington, Matthew
Freeman, Roger


Cash, William
French, Douglas


Channon, Paul
Fry, Sir Peter


Chapman, Sir Sydney
Gale, Roger






Gallie, Phil
Mawhinney, Dr Brian


Gardiner, Sir George
Merchant, Piers


Gamier, Edward
Mills, lain


Gill, Christopher
Mitchell, Andrew (Gedling)


Gillan, Mrs Cheryl
Mitchell, Sir David (NW Hants)


Goodlad, Alastair
Moate, Sir Roger


Goodson-Wickes, Dr Charles
Monro, Sir Hector


Gorman, Mrs Teresa
Montgomery, Sir Fergus


Gorst, Sir John
Needham, Richard


Grant, Sir Anthony (SW Cambs)
Nelson, Anthony


Greenway, Harry (Ealing N)
Newton, Tony


Greenway, John (Ryedale)
Nicholls, Patrick


Griffiths, Peter (Portsmouth N)
Norris, Steve


Gummer, John
Oppenheim, Phillip


Hamilton, Sir Archibald
Paice, James


Hamilton, Neil (Tatton)
Patnick, Sir Irvine


Hampson, Dr Keith
Patten, John


Hannam, Sir John
Pattie, Sir Geoffrey


Hargreaves, Andrew
Pawsey, James


Haselhurst, Sir Alan
Peacock, Mrs Elizabeth


Hawkins, Nick
Pickles, Eric


Hawksley, Warren
Porter, David (Waveney)


Hayes, Jerry
Portillo, Michael


Heald, Oliver
Powell, William (Corby)


Hendry, Charles
Rathbone, Tim


Heseltine, Michael
Redwood, John


Hill, Sir James (Southampton Test)
Renton, Tim


Horam, John
Riddick, Graham


Hordern, Sir Peter
Robathan, Andrew


Howard, Michael
Roberts, Sir Wyn


Howell, Sir Ralph (N Norfolk)
Robertson, Raymond S (Ab'd'n S)


Hughes, Robert G (Harrow W)
Robinson, Mark (Somerton)


Hunt, David (Wirral W)
Roe, Mrs Marion


Hunt, Sir John (Ravensb'ne)
Rowe, Andrew


Hunter, Andrew
Rumbold, Dame Angela


Hurd, Douglas
Sackville, Tom


Jack, Michael
Sainsbury, Sir Timothy


Jackson, Robert (Wantage)
Scott, Sir Nicholas


Jenkin, Bernard (Colchester N)
Shaw, David (Dover)


Jessel, Toby
Shaw, Sir Giles (Pudsey)


Johnson Smith, Sir Geoffrey
Shephard, Gillian


Jones, Gwilym (Cardiff N)
Shepherd, Sir Colin (Henefd)


Jones, Robert B (W Herts)
Shersby, Sir Michael


Jopling, Michael
Sims, Sir Roger


Key, Robert
Skeet, Sir Trevor


King, Tom
Smith, Tim (Beaconsfld)


Knight, Mrs Angela (Erewash)
Soames, Nicholas


Knight, Greg (Derby N)
Speed, Sir Keith


Knight, Dame Jill (Edgbaston)
Spencer, Sir Derek


Knox, Sir David
Spicer, Sir Jim (W Dorset)


Kynoch, George
Spicer, Sir Michael (S Worcs)


Lait, Mrs Jacqui
Spink, Dr Robert


Lang, Ian
Spring, Richard


Lawrence, Sir Ivan
Sproat, lain


Legg, Barry
Squire, Robin (Hornchurch)


Leigh, Edward
Stanley, Sir John


Lennox-Boyd, Sir Mark
Steen, Anthony


Lester, Sir Jim (Broxtowe)
Stephen, Michael


Lidington, David
Stewart, Allan


Lilley, Peter
Streeter, Gary


Lloyd, Sir Peter (Fareham)
Sumberg, David


Lord, Michael
Sweeney, Walter


Luff, Peter
Sykes, John


Lyell, Sir Nicholas
Taylor, Ian (Esher)


MacGregor, John
Taylor, John M (Solihull)


MacKay, Andrew
Taylor, Sir Teddy


Maclean, David
Thomason, Roy


McLoughlin, Patrick
Thompson, Sir Donald (Calder V)


Madel, Sir David
Thompson, Patrick (Norwich N)


Maitland, Lady Olga
Thumham, Peter


Malone, Gerald
Townend, John (Bridlington)


Mans, Keith
Townsend, Cyril D (Bexl'yh'th)


Marland, Paul
Tracey, Richard


Marshall, John (Hendon S)
Tredinnick, David


Marshall, Sir Michael (Arundel)
Trend, Michael


Martin, David (Portsmouth S)
Twinn, Dr Ian





Vaughan, Sir Gerard
Whittingdale, John


Viggers, Peter
Widdecombe, Miss Ann


Waldegrave, William
Wiggin, Sir Jerry


Walden, George
Wilkinson, John


Walker, Bill (N Tayside)
Wilshire, David



Winterton, Nicholas (Macdesf'ld)


Waller, Gary
Wolfson, Mark


Ward, John
Yeo, Tim


Wardle, Charles (Bexhill)
Young, Sir George


Waterson, Nigel



Watts, John
Tellers for the Ayes:


Wells, Bowen
Mr. Timothy Wood and Mr. Richard Ottaway.


Whitney, Ray





NOES


Abbott, Ms Diane
Dixon, Don


Ainger, Nick
Dobson, Frank


Ainsworth, Robert (Cov'try NE)
Dowd, Jim


Allen, Graham
Dunwoody, Mrs Gwyneth


Anderson, Donald (Swansea E)
Eagle, Ms Angela


Anderson, Ms Janet (Ros'dale)
Eastham, Ken


Armstrong, Ms Hilary
Etherington, Bill


Ashton, Joseph
Evans, John (St Helens N)


Austin-Walker, John
Fatchett, Derek


Bames, Harry
Faulds, Andrew


Barron, Kevin
Field, Frank (Birkenhead)


Battle, John
Fisher, Mark


Beckett, Margaret
Flynn, Paul


Bell, Stuart
Foster, Derek


Benn, Tony
Foster, Don (Bath)


Bennett, Andrew F
Foulkes, George


Benton, Joe
Fraser, John


Bermingham, Gerald
Fyfe, Mrs Maria


Berry, Roger
Galloway, George


Betts, Clive
Gapes, Mike


Blair, Tony
Garrett, John


Boateng, Paul
Gilbert, Dr John


Bradley, Keith
Godman, Dr Norman A


Bray, Dr Jeremy
Godsiff, Roger


Brown, Gordon (Dunfermline E)
Golding, Mrs Llin


Brown, Nicholas (Newcastle E)
Gordon, Ms Mildred


Bruce, Malcolm (Gordon)
Grant, Bernie (Tottenham)


Byers, Stephen
Griffiths, Nigel (Edinburgh S)


Cabom, Richard
Griffiths, Win (Bridgend)


Callaghan, Jim
Grocott, Bruce


Campbell, Mrs Anne (C'bridge)
Hain, Peter


Campbell, Menzies (Fife NE)
Hall, Mike


Campbell, Ronnie (Blyth V)
Hanson, David


Campbell-Savours, D N
Hardy, Peter


Canavan, Dennis
Harman, Ms Harriet


Cann, Jamie
Harvey, Nick


Chisholm, Malcolm
Hattersley, Roy


Church, Ms Judith
Henderson, Doug


Clapham, Michael
Heppell, John


Clark, Dr David (S Shields)
Hill, Keith (Streatham)


Clarke, Tom (Monklands W)
Hinchliffe, David


Clelland, David
Hodge, Ms Margaret


Clwyd, Mrs Ann
Hogg, Norman (Cumbernauld)


Coffey, Ms Ann
Hoon, Geoffrey


Cohen, Harry
Howarth, Alan (Stratf'd-on-A)


Connarty, Michael
Howarth, George (Knowsley N)


Cook, Frank (Stockton N)
Howells, Dr Kim


Cook, Robin (Livingston)
Hoyle, Doug


Corbyn, Jeremy
Hughes, Kevin (Doncaster N)


Corston, Ms Jean
Hughes, Robert (Ab'd'n N)


Cousins, Jim
Hutton, John


Cox, Tom
Jackson, Ms Glenda (Hampst'd)


Cunningham, Jim (Cov'try SE)
Jackson, Mrs Helen (Hillsborough)


Cunningham, DrJohn
Jamieson, David


Dafis, Cynog
Jenkins, Brian (SE Staffs)


Dalyell, Tam
Johnston, Sir Russell


Darling, Alistair
Jones, Barry (Alyn &amp; D'side)


Davies, Chris (Littleborough)
Jones, Dr L (B'ham Selly Oak)


Davies, Denzil (Llanelli)
Jones, Nigel (Cheltenham)


Davis, Terry (B'ham Hodge H)
Jowell, Ms Tessa


Dewar, Donald
Kaufman, Gerald






Keen, Alan
Radice, Giles


Kennedy, Mrs Jane (Broadgreen)
Randall, Stuart


Khabra, Piara S
Raynsford, Nick


Kilfoyle, Peter
Reid, Dr John


Kirkwood, Archy
Rendel, David


Lestor, Miss Joan (Eccles)
Robertson, George (Hamilton)


Livingstone, Ken
Robinson, Geoffrey (Cov'try NW)


Lloyd, Tony (Stretf'd)
Roche, Mrs Barbara


Lynne, Ms Liz
Rogers, Allan


McAllion, John
Rooker, Jeff


McAvoy, Thomas
Rooney, Terry


McCartney, Ian (Makerf'ld)
Ross, Ernie (Dundee W)


Macdonald, Calum
Ruddock, Ms Joan


McFall, John
Sedgemore, Brian


McKelvey, William
Sheerman, Barry


Mackinlay, Andrew
Sheldon, Robert


McLeish, Henry
Shore, Peter


McMaster, Gordon
Short, Ms Clare


McNamara, Kevin
Simpson, Alan


MacShane, Denis
Skinner, Dennis


Madden, Max
Smith, Andrew (Oxford E)


Maddock, Mrs Diana
Smith, Llew (Blaenau Gwent)


Mahon, Mrs Alice
Smyth, Rev Martin (Belfast S)


Marshall, David (Shettleston)
Spearing, Nigel


Martin, Michael J (Springbum)
Spellar, John


Maxton, John
Steel, Sir David


Meacher, Michael
Steinberg, Gerry


Meale, Alan
Stevenson, George


Michael, Alun
Stott, Roger


Michie, Bill (Shef'ld Heeley)
Strang, Dr Gavin


Miller, Andrew
Straw, Jack


Mitchell, Austin (Gt Grimsby)
Sutcliffe, Gerry



Taylor, Mrs Ann (Dewsbury)


Molyneaux, Sir James
Taylor, Matthew (Truro)


Moonie, Dr Lewis
Thompson, Jack (Wansbeck)


Morgan, Rhodri
Timms, Stephen


Morris, Alfred (Wy'nshawe)
Tipping, Paddy


Morris, Ms Estelle (B'ham Yardley)
Touhig, Don


Mowlam, Ms Marjorie
Trickett, Jon


Mudie, George
Tyler, Paul


Mullin, Chris
Vaz, Keith


Murphy, Paul
Walker, Sir Harold


Nicholson, Miss Emma (W Devon)
Wardell, Gareth (Gower)


O'Brien, William (Normanton)
Wareing, Robert N


Olner, Bill
Watson, Mike


Orme, Stanley
Wicks, Malcolm


Pearson, Ian
Williams, Alan (Swansea W)


Pendry, Tom
Williams, Alan W (Carmarthen)


Pickthall, Colin
Winnick, David


Pike, Peter L
Wise, Mrs Audrey


Pope, Greg
Wright, Dr Tony


Prentice, Mrs B (Lewisham E)



Prentice, Gordon (Pendle)
Tellers for the Noes:


Prescott, John
Mr. Eric Clarke and


Primarolo, Ms Dawn
Mr. Eric Martlew.

Question accordingly agreed to.
Amendments made in lieu of the Lords amendment: (b), in page 57, line 33, leave out from first 'order' to end of line 37 and insert
'subject to this limit, that the fees payable in respect of any one application or reference by the court together with any proceedings before the tribunal arising out of that application or reference shall not exceed £500 or such other amount as may be specified by order of the Secretary of State.'.
(c), in page 58, line 2, leave out 'which, unless the order' and insert—


'( ) No order altering the limit under subsection (3) shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
( ) Any other order under this section, unless ie.—[Mr. Brandreth.]

New clause

Lords amendment: No. 115, before clause 85, to insert the following new clause—Application of right of first refusal in relation to contracts—
.—( 1 ) After section 4 of the Landlord and Tenant Act 1987 (relevant disposals) insert—

"Application of provisions to contracts.

4A.—(1) The provisions of this Part apply to a contract to create or transfer an estate or interest in land, whether conditional or unconditional and whether or not enforceable by specific performance, as they apply in relation to a disposal consisting of the creation or transfer of such an estate or interest.

As they so apply—

(a) references to a disposal of any description shall be construed as references to a contract to make such a disposal;
(b) references to making a disposal of any description shall be construed as references to entering into a contract to make such a disposal; and
(c) references to the transferee under the disposal shall be construed as references to the other party to the contract and include a reference to any other person to whom an estate or interest is to be granted or transferred in pursuance of the contract.

(2) The provisions of this Part apply to an assignment of rights under such a contract as is mentioned in subsection (I) as they apply in relation to a disposal consisting of the transfer of an estate or interest in land.

As they so apply—

(a) references to a disposal of any description shall be construed as references to an assignment of rights under a contract to make such a disposal;
(b) references to making a disposal of any description shall be construed as references to making an assignment of rights under a contract to make such a disposal;
(c) references to the landlord shall be construed as references to the assignor; and
(d) references to the transferee under the disposal shall be construed as references to the assignee of such rights.

(3) The provisions of this Part apply to a contract to make such an assignment as is mentioned in subsection (2) as they apply (in accordance with subsection (1)) to a contract to create or transfer an estate or interest in land.

(4) Nothing in this section affects the operation of the provisions of this Part relating to options or rights of pre-emption.".

(2) In section 4(2) of the Landlord and Tenant Act 1987 (relevant disposals: excluded disposals), for paragraph (i) (certain disposals in pursuance of existing obligations) substitute—
(i) a disposal in pursuance of a contract, option or right of pre-emption binding on the landlord (except as provided by section 8D (application of sections 11 to 17 to disposal in pursuance of option or right of pre-emption));".

(3) In section 20(1) (interpretation), in the definition of "disposal" for "has the meaning given by section 4(3)" substitute "shall be construed in accordance with section 4(3) and section 4A (application of provisions to contracts)"."

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Michael Morris): With this, it will be convenient to take Lords amendments Nos. 116 to 121, 248 and 287, Lords amendment No. 287, Government amendment (a) thereto and Lords amendment No. 321.

Mr. Clappison: These amendments on the right of first refusal caused some controversy in another place but I hope that I shall be able to do justice to the changes. They would make significant changes to part I of the Landlord and Tenant Act 1987 and are necessary to accommodate three important elements.
First, they would make it a criminal offence for the landlord of a block of flats to fail to offer his interest to the tenants when he wishes to sell. The criminal offence was introduced as the Bill proceeded through this House, but was extended by Lords amendment No. 118 to cover a landlord's contravention of any prohibition or restriction imposed on him, such as when a landlord serves a notice but goes ahead with a sale without waiting for the tenants' response.
The second element provides for certain special cases, such as sale by auction, which was the subject of a commitment given in the House, and deals with grants of options or right of pre-emption and how to manage when the landlord's price includes a non-monetary element.
Thirdly—this precipitated some significant changes, especially through Lords amendment No. 287—there is the need to specify when a relevant disposal takes place, especially in view of the criminal offence. When a transaction includes an exchange of contracts., that exchange will be the relevant disposal. That will crystallise the offence if the landlord has not offered his interest to the tenants by that stage.
The necessity for changing substantial parts of the measure also gave the opportunity to recast other parts of the Bill so that it will be easier to follow and to use. It was the accommodation of the principle that an exchange of contracts can be a relevant disposal that required the amendments.

Mr. Raynsford: We are dealing with a third category of leasehold problems—the failure of the Landlord and Tenant Act 1987 to provide the supposed opportunity for leaseholders to acquire the freehold of their homes when the freeholder chooses to dispose of it. That was the intention of the 1987 Act, but it has not in practice proved an easy or problem-free route for leaseholders seeking to acquire the freehold of their homes.
The most notable case that demonstrated the failure was that involving Smith's Charity which, despite its benevolent-sounding name, acted malevolently to its leaseholders when it chose to dispose of its freehold interest last summer to a another landowner, the Wellcome Trust, without offering its leaseholders the right of first refusal that it was supposed to offer under the 1987 Act. That prompted a wave of public protest and pressure for changes in the law, which has undoubtedly influenced the Housing Bill towards the changes in the amendments.
The charity's action also prompted a case against it by the leaseholders affected, which partially overcame the problem but left a highly confusing judgment that suggested that the applicable date for the duty to notify the leaseholders of their right to first refusal was not the

date at which the contracts were exchanged but that at which the sale was completed. Given that the circumstances of many property sales could mean their not being completed for several years, and that during that time leaseholders would have no opportunity to exercise their rights, that was nonsense.
Equally, even where the sale occurred without a protracted period before completion, it would be nonsense if leaseholders were not entitled to receive a notice of the proposed disposal at the time at which the contract was entered into. The problem was brought to public attention as a result of the court case, and the issue exercised us considerably in Committee.
The Minister and other Conservative Members commented on the Opposition's objections to the large number of amendments. We have no objection to the changes being made to improve the Bill; we object only to the procedure, which has involved an enormous raft of amendments being presented to us at very short notice. The Lords Third Reading was last Wednesday. It was only mid-morning on Thursday that we received the list of amendments—329 of them, some very long. To comply with the normal requirements of the House, notice of amendments to the amendments had to be with the Clerks by the end of business that very day.
To go through such a volume of amendments, seek to make intelligent observations and table amendments to them was quite a process. Lords amendment No. 287 is a new schedule of 21 pages and contains significant changes, many of which were entirely new. While it built on comments made in Committee, it involved forms of legislation that were not already in the public domain. There are new concepts that require careful scrutiny, and we have been unable to give them the scrutiny we would normally like to give them. It is the procedure and the timetable to which we object rather than the fact of the Bill being amended and improved—we welcome the fact that it is being improved.
There have been a series of last-minute changes to remedy some of the problems of the present procedure and make it easier for leaseholders to exercise their right of first refusal as and when a landowner decides to dispose of a property. We welcome that change and will not oppose any of the amendments in the group, because they take forward a process that should have been completed in 1987, but has required a great deal more attention because of the failure of the 1987 Act.
We are concerned about the scope that still exists for landlords to abuse the system by devious means, even when notionally complying with the letter of the law. I have received representations from leaseholders living in Connaught mews in the London borough of Greenwich. They live not in the constituency that I have the honour to represent, but in the borough of Greenwich. They have had the most appalling experience when trying to acquire the freehold of their homes.
I have corresponded with the Minister about the case, so he will be familiar with it. I shall not go through the details now. Suffice to say that, when the leaseholders eventually prised out of the freeholder details of the price that they had to pay to acquire the freehold and got to the stage that they believed they could proceed with the purchase, the freeholder came up with a disreputable device to prevent them from exercising that right, by claiming that they were out of time. While the


leaseholders sought the information to enable their application to proceed, the clock had continued to tick and the time scale for exercising the right of first refusal had passed.
Such exploitation of the loopholes by unscrupulous freeholders is characteristic of the problems that leaseholders have confronted; we have exposed them and want to block them. I fear that a loophole that allows freeholders to get around the legislation will not be closed by the measures that we are agreeing. It will be astonishing if legislation that has been prepared in such a hurry, with so little opportunity for detailed scrutiny, proves to be entirely problem-free.
I remind hon. Members that the 1987 Act was passed in a great hurry, just before the 1987 election, to give the impression that the Government were acting on behalf of leaseholders—and that its failure is the cause of the amendments. That Act was put together in too great haste. There was not proper time for detailed scrutiny, so, sadly, it was not put on the statute book in a form that made it possible for leaseholders to take full advantage of it. It is riddled with loopholes, has proved unsatisfactory and now has to be amended.
Although what we are doing in this group of amendments is, in principle, the right thing—making it easier for leaseholders to get the right of first refusal so that they can buy the freehold of their home when the freeholder chooses to dispose of it—the way in which we are doing it, through a huge mass of last-minute amendments and without the proper time for scrutiny, will inevitably result in loopholes or legal difficulties, which will prove problematic. I fear that this is yet another area of leasehold reform that will require revisiting. Having said that, we will not oppose the amendments, because they make legislation that is thoroughly unsatisfactory better.

Lords amendment agreed to.

Lords amendments Nos. 116 to 121 agreed to.

Clause 95

RECOVERY OF POSSESSION WHERE GRANT INDUCED BY FALSE STATEMENT

Lords amendment: No. 122, in page 63, line 37, at end insert (", or
(b) a person acting at the tenant's instigation.".")

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to take Lords amendment No. 147.

Mr. Clappison: The amendment introduces a new discretionary ground for possession for assured tenancies where the landlord has been
induced to grant the tenancy by a false statement made knowingly or recklessly by the tenant.
It extends the ground to cover false statements provided by a third party at the tenant's instigation.
Lords amendment No. 147 extends the deceit ground for possession for secure tenancies.

Mr. Raynsford: We agree with the purpose of the Government's actions, but are troubled by the way in which the amendment has been drafted. Lords amendment No. 122 would add a second category to the category of people who knowingly or recklessly made a false statement. It does so by adding to the Bill
(b) a person acting at the tenant's instigation",
without making it clear who is in category (a).
In Lords amendment No. 147, which is for secure tenancies, it is clear that "(a) the tenant, or" should be inserted in the final line of page 63 of the Bill. On first observation, it is not clear whether that is the correct interpretation for Lords amendment No. 122. If that were not correctly interpreted when the Bill was finally put to bed, we could have a nonsense here.
I hope that the Minister will assure us that Lords amendment would change clause 95, which deals with ground 17, so that it would read:
The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by the tenant, or
(b) a person acting at the tenant's instigation.
I make that point in the spirit in which we have approached the legislation—of seeking to improve the unsatisfactory parts and not wanting legislation to reach the statute book in a form that could be ambiguous or confusing, thereby creating further problems that would have to be amended at some future date.

Mr. Clappison: I think that ground 17 will become (a) and will deal with the case of the tenant making the sort of representation in question and, as a result of the amendment, (b) will be inserted to cover a third party acting at the tenant's instigation. I must make it clear that the amendment covers a false statement made by (a) the tenant or (b) the third party and that that will be clear when the Bill is printed.

Mr. Raynsford: If the Minister's initial interpretation is correct, there is a problem. If the Bill were to read
"Ground 17—(a) The tenant is the person'",
as he implied, it would make no sense. The Bill would make sense only if it read
"Ground 17—The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by
(a) the tenant".
If the Minister can confirm that that is the case, we are out of the problem.

Mr. Clappison: That was what I was trying to convey in my original submission. I am sorry that I did not make it sufficiently clear. Those are the two circumstances contemplated by the clause as amended.

Lords amendment agreed to.

New clause

Lords amendment: No. 123, before clause 98, to insert the following new clause—Low rent test: nil rateable values—
.—(1) In section 4(1) of the Leasehold Reform Act 1967 (meaning of "low rent")—

(a) in paragraph (i) (cases where rent limit of two-thirds of rateable value on later of appropriate day and first day of term applies), for the words from "or (where" to "that date" there shall be substituted ", or on or after 1st April 1990 in pursuance of a contract made before that date, and the property had a rateable value other than nil at the date of the commencement of the tenancy or else at any time before 1st April 1990,",
(b) in paragraph (ii) (other cases), for the words from "is entered" to "1990)," there shall be substituted "does not fall within paragraph (i) above,", and
(c) in paragraph (a) (definition of "appropriate day" by reference to section 25(3) of the Rent Act 1977), there shall be inserted at the end "if the reference in paragraph (a) of that provision to a rateable value were to a rateable value other than nil".

(2) In section 4A of the Leasehold Reform Act 1967 (alternative rent limits for the purposes of section IA(2) of that Act)—

(a) in subsection (1)(b) (cases where rent limit of two-thirds of rateable value on the relevant date applies), for sub-paragraph (ii) there shall be substituted—
"(ii) the property had a rateable value other than nil at the date of commencement of the tenancy or else at any time before 1st April 1990,", and
(b) in subsection (2), for paragraph (b) there shall be substituted—
"(b) "the relevant date" means the date of the commencement of the tenancy or, if the property did not have a rateable value, or had a rateable value of nil, on that date, the date on which it first had a rateable value other than nil;".

(3) In section 8 of the Leasehold Reform, Housing and Urban Development Act 1993 (leases at a low rent)—

(a) in subsection (1)(b) (cases where rent limit of two-thirds of rateable value on the appropriate date applies), for sub-paragraph (ii) there shall be substituted—
"(ii) the flat had a rateable value other than nil at the date of the commencement of the lease or else at any time before 1st April 1990,", and
(b) in subsection (2), for paragraph (b) there shall he substituted—
"(b) "the appropriate date" means the date of commencement of the lease or, if the flat in question did not have a rateable value, or had a rateable value of nil, on that date, the date on which the flat first had a rateable value other than nil;"."

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to take Lords amendments Nos. 124, 125 and 128, Lords amendment No. 288 and amendment (a) thereto, Lords amendment No. 289 and amendment (a) thereto, Lords amendment No. 290 and amendment (a) thereto, Lords amendments Nos. 291 and 292, Lords amendment No. 293 and amendment (a) thereto, Lords amendment No. 294 and amendment (a) thereto, and Lords amendment No. 295 and amendment (a) thereto.

Mr. Clappison: We now come to the subject of leasehold enfranchisement, including the subject of the

low-rent test, which will be familiar to hon. Members in the Chamber who were members of the Standing Committee. I can deal briefly with amendments Nos. 123 to 125, 128, 291 and 292, because they deal with some minor issues relating to leasehold enfranchisements. In particular, it will now be possible for owners of leases with nil rateable values to enfranchise.
I now move on to amendments Nos. 288 to 290 and 293 to 295. The House will recall that, on Report, we abolished the low-rent test for leases over 50 years. We made it clear that we were prepared to be flexible on this figure. We have been persuaded that 35 years would be a more appropriate figure, and we were pleased to accept Opposition amendments tabled in another place by a former distinguished Member of this House to that effect. As a result, we have reactivated the ability of landlords to promote estate management schemes where their properties are newly enfranchiseable.
The other measures in this group are an anti-avoidance device for the rural exemption to the low-rent test, and a transfer of the jurisdiction to rule on the reasonableness of costs for enfranchisement cases under the Leasehold Reform Act 1967 from the court to the leasehold valuation tribunal.
Turning to the background to the low-rent test, throughout our debates the Government have maintained a consistent and principled approach. Let me briefly remind hon. Members why we are seeking to maintain a test of this kind. The policy has been to give enfranchisement rights to those leaseholders who might be regarded as owner-occupiers. This is the broad policy behind the Bill, the 1967 legislation introduced by a Labour Government, and the more recent Leasehold Reform, Housing and Urban Development Act 1993.
In order to establish whether the leaseholder is an owner-occupier, two tests have been used. First, there must be a long lease—generally more than 21 years. Secondly, the tenant must pay only a nominal ground rent, rather than a market rent. If those two conditions are satisfied, then, except during the final years of the lease, the tenant is likely to have a greater financial stake in the property than the landlord. The hon. Member for Greenwich, with his knowledge of these matters, will be familiar with what I am saying, but the 1967 Act also used as the test a long lease at a low rent.
So, for a long time, there has been a low-rent test. The form differs slightly according to the circumstances, but generally it requires that the rent should be less than two thirds of the rateable value of the property. The purpose of the test is, as I have said, to distinguish between owner-occupier tenants and renting tenants.
There has been pressure to amend or remove the low-rent test. I think that this was not so much because it was thought that renting tenants should be given enfranchisement rights, but because in practice the low-rent test has given rise to difficulties. There are leases where the rent is technically above the low rent limit, but is nevertheless closer to being a nominal ground rent than a full rack rent. In some cases, this has arisen by chance, perhaps because properties were not revalued for rating purposes between 1973 and the end of the rating system in 1990, while ground rents crept up slightly in line with inflation. In other cases, some landlords may have intentionally set rents a small amount above the limit to which I have referred.
The Government have accepted that there is a case for reform. As I have already said, we introduced an amendment on Report in this House which would abolish the low-rent test for leases in excess of 50 years, and, following the debate in another place, we have reduced that period to 35 years.
I have to concede that there are no overwhelmingly strong grounds for 35 years, although it is perhaps important—before the hon. Member for Greenwich gets carried away—that eminent members of the valuation profession have said that this is a significant point at which the freehold value rises to about one third of the total interest in the property. I remind the hon. Gentleman that an Opposition Member of the other place tabled an amendment to introduce a period of 35 years. Therefore, that was the time limit lighted upon by a member of the hon. Gentleman's party. That is the background to the 35 years.
We believe that there should be a range of lease lengths—it is now becoming quite a short range, comprising leases of between 21 and 35 years—for which the low-rent test should be retained. I am concerned that there are some leases within this range which are at rack rents, and hence the tenant's stake in them has never been anywhere near so significant as the landlord's. Some landlords wish to let properties on renting tenancies, but equally wish to give the tenant a substantial period of security—for example, in return for the tenant taking on the maintenance and repairing obligations.
We need to recognise that we have responsibilities to both sides, and we need to have regard to equity in the matter. The Government therefore believe that the 35-year rule should be maintained. The vast majority of leases are for more than 35 years. The position for the handful of leases under 35 years is that the low-rent test, which already exists, continues to apply to long leases. That test requires that the lease must be set at a nominal ground rent for enfranchisement to proceed. Only leases of less than 35 years and which are let at rack rents will be excluded.
I hope that the House agrees that we have taken a reasoned and flexible approach, but one which has sought to create equity in a general sense between the two interests. We feel that we have made a compromise at an appropriate point, and we hope that the House will be able to support the Lords amendment and to disagree with the amendments tabled by the Opposition.

Mr. Raynsford: The subject of the low-rent test and the history of what has happened in the past six months as the Bill has progressed through the House is extraordinarily revealing of the Government's attitude to leasehold reform. One could not have a clearer indication of their response. It has not involved, as the Minister claimed, a consistent and principled approach. The Government's approach has been inconsistent and unprincipled. I shall now reveal exactly why.
When we considered the matter in Committee, the Opposition successfully moved an amendment, with the support of the hon. Member for North-West Leicestershire (Mr. Ashby), to abolish the low-rent test. The Government opposed the amendment. They were opposed to any change in the existing low-rent test. They

were defeated. When the Bill came to the House on Report, the Government did not accept that defeat. They sought to reinstate a low-rent test, but with a 50-year limitation. They argued that that was an appropriate cut-off point—that 50 years was the right period below which the low-rent test should apply but above which it might not apply.
The Government just managed to get away with reinstating the low-rent test, with a narrow majority—two votes. The amendment would not have been defeated if Conservative Members who pledged their support to leaseholders had joined us in the Division Lobby. Only the hon. Member for Bolton, North-East (Mr. Thumham). an independent-minded Member of Parliament in every respect, joined us.
Other Conservative Members, including the hon. Member for North-West Leicestershire, who supported us in Committee, did not support us on Report, so the abolition of the low-rent test sadly was not carried on that occasion, and the Government got away with introducing a 50-year limitation. However, it was pointed out that the 50-year limitation was arbitrary. There was no logic behind it or any particular reason for it, and it created anomalies. We highlighted some of those anomalies and drew attention to people who would suffer as a result of that 50-year cut-off.
So what has happened? The Government, faced with that argument, have made a further modest retreat. They were not prepared to do the decent thing and accept that the low-rent test should be abolished altogether. They have reduced the period during which the low-rent test will apply from 50 to 35 years. Hon. Members heard the Minister say this evening that there was no particularly good reason for 35 years rather than any other figure. We have once again an arbitrary figure.
The Minister prayed in aid some specious evidence about some valuers who said that perhaps a period was appropriate in which the leasehold interest began to reduce significantly as against the freehold interest. To persuade us of that, the Minister must produce convincing evidence that the cut-off point is precisely 35 years rather than 33, 34 or 36 years. Some pretty clever statistics will be needed to convince us that the balance between the leaseholder's and the freeholder's interest magically transforms at 35 years.
The 35 years is yet another arbitrary figure plucked out of the air by a Government who do not have the courage of their convictions to support leaseholders, because they are in hock to the big landowners. That is why we still have a low-rent test. As soon as the Committee had abolished the low-rent test, all the landed interests came flooding into the Department of the Environment, throwing their hands up in horror and saying, "This will be disastrous. This will ruin us. It will destroy the great landed estates"—and probably saying, although I cannot prove it, "And you won't get your donations to the Conservative party any more if you don't do what we want and reinstate some type of low-rent test."
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As a result of that pressure from the big landowners, the Government embarked on the absurd process of trying to put back a low-rent test for a shorter period, without consistency, principle or logic. Effectively, it has been a retreat under pressure, carried out with little grace, and with a final product that is far from satisfactory.
The House should consider why a low-rent test was necessary in the first place. The Minister said, and I am the first to acknowledge, that a low-rent test was introduced by the Labour Government in 1967 when they introduced leasehold enfranchisement for houses. and I would argue that, at that time, a low-rent test was entirely appropriate and proper.
The private rented market then was different from that today. There was detailed and rigorous rent control. Landlords were unable to let on a tenancy giving a rack rent, because they were subject to stringent rent controls, with rents set by rent officers under the provision introduced by the Labour Government in the early 1960s. A landlord who wanted to obtain a larger return often resorted to the device of a lease—notionally a lease—of 12 or 15 years, perhaps longer, to ensure a return that could not have been secured by letting the properly on a regulated tenancy.
In that framework, the lease was used as a device to get around rent control. To distinguish between a property that was let as a tenanted property and one that was truly a leased property for which the leaseholder had paid a substantial premium to acquire as their home, the low-rent test was understandable and justifiable.
The Minister knows that the world has changed. The private rented market has been deregulated. No new regulated tenancies are being created. The framework of assured shorthold tenancies and assured tenancies allows landlords to let, at a rack rent if they want to do so, without risk. There is no longer a need to distinguish between a straightforward tenancy of that nature and a leasehold property where the lease has been granted on a premium. That is why a low-rent test was necessary in 1967 but is unnecessary today.
The overwhelming consensus in the property industry is that 21 years is the proper period to use to distinguish a lease, in the sense in which we all understand it, from a tenancy. People recognise that cut-off point as the borderline between the two.
That is why, in our amendment, we are substituting 21 for 35. There is a logic behind 21 years. It is widely understood that that is the distinction between leasing and tenancy, whereas there is no such justification for the 35-year figure. Our amendment is consistent and logical. It ensures the proper abolition of the low-rent test, without creating the anomalies that have existed to date and which, sadly, will continue if the Government amendments are adopted.
The low-rent test is no longer needed, and should be abolished. Any Government who had the courage of their convictions and were able to stand up to the big landowners and their vested interests, any Government approaching this in a principled and consistent way, as the Minister claimed to do, would agree with the Opposition that the low-rent test should be abolished, and would therefore agree that 21 years is the appropriate figure to use to distinguish a tenancy from a leasehold.

Mr. Clappison: With the leave of the House, Mr. Deputy Speaker, I shall make three brief points.
First, I was not impressed by the explanation offered by the hon. Member for Greenwich (Mr. Raynsford) for the failure of the 1964 and 1970 Labour Governments in this area. In fact, their enfranchisement proposals were restricted to houses, and did not apply to flats. The hon.

Gentleman talks about rent regulation. He is aware that that applies to shorter tenancies, not to the leases to which we are referring, and that leaseholders had no opportunity to enfranchise in those periods of Labour Government.
Secondly, the hon. Gentleman chastises us for choosing a fixed time limit, and then recommends a fixed time limit—one of 21 years rather than 35 years. That time limit was proposed in an Opposition amendment in another place. The Opposition in another place may have been seduced by the sort of complaints that the hon. Gentleman envisages coming from the great propertied classes.
Thirdly, that is hardly consistent, which is one of the hon. Gentleman's familiar complaints, with the fact that we were at first prepared to introduce a test of 50 years, and then said that we were prepared to be flexible and reduced it to 35. No doubt we have done so over the massed ranks of bodies of the landed estates, the aristocracy and the great landed interests, but only the hon. Gentleman appears to have noticed that.

Lords amendment agreed to.

Lords amendments Nos. 124 and 125 agreed to.

New clause

Lords amendment: No. 126, after clause 105, to insert the following new clause—Compensation for postponement of termination in connection with ineffective claims—
. Schedule (Compensation for postponement of termination in connection with ineffective claims) (which makes, in relation to claims to enfranchisement or an extended lease under Part I of the Leasehold Reform Act 1967 and claims to collective enfranchisement or a new lease under Chapter I or II of Part I of the Leasehold Reform, Housing and Urban Development Act 1993, provision for compensation of the landlord where the claim has prolonged an existing tenancy, but is ineffective) shall have effect.

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to take Lords amendment No. 296.

Mr. Clappison: These amendments allow landlords to claim compensation for the market rent forgone when an unsuccessful claim for enfranchisement or a new lease is made during the last two years of the original lease term, and results in the leaseholder holding over their ground rent. This provision will come into force on 15 January 1999.

Mr. Raynsford: This is another amendment that serves the landlord's interest.
A short course of study of the history of leasehold reform would be advisable before the Minister makes further remarks in the House about the merits of the Leasehold Reform Act 1967. Anyone who has studied leasehold reform knows that that was by far the most effective piece of leasehold reform legislation that has been passed since the war. It resulted in hundreds of thousands of leaseholders being able to buy the freehold of their homes. That was a successful piece of leasehold reform.
All the present Government's measures attempting to bring justice to leaseholders have failed. The Landlord and Tenant Act 1985, the Landlord and Tenant Act 1987


and the Leasehold Reform, Housing and Urban Development Act 1993 have all been seen to fail, because the Government surrendered the principle of support for leaseholders to their financial interest because they are bankrolled by the big landowners. It is hardly surprising, therefore, that they are supporting an amendment that will allow compensation to landowners, which I am sure is dear to the hearts of landowners and dear to the heart of the Government.
We will continue to press for the interests of leaseholders, and, after the next election, when a Labour Government have once again been returned to this country, Labour will prepare a proper and comprehensive measure of leasehold reform, to ensure that leaseholders at long last get a measure to parallel the achievements of the 1967 Act, which achieved very great things for leaseholders in houses. It will be the next Labour Government's historic duty and responsibility to ensure that leaseholders in flats achieve a similar benefit.

Lords amendment agreed to.

New clause

Lords amendment: No. 127, after clause 105, to insert the following new clause—Priority of interests on grant of new lease—

". After section 58 of the Leasehold Reform, Housing and Urban Development Act 1993 there shall be inserted—
Priority of interests on grant of new lease.

58A.—(1) Where a lease granted under section 56 takes effect subject to two or more interests to which the existing lease was subject immediately before its surrender, the interests shall have the same priority in relation to one another on the grant of the new lease as they had immediately before the surrender of the existing lease.

(2) Subsection (1) is subject to agreement to the contrary.

(3) Where a person who is entitled on the grant of a lease under section 56 to rights of occupation in relation to the flat comprised in that lease was entitled immediately before the surrender of the existing lease to rights of occupation in relation to the flat comprised in that lease, the rights to which he is entitled on the grant of the new lease shall be treated as a continuation of the rights to which he was entitled immediately before the surrender of the existing lease.

(4) In this section—
the existing lease", in relation to a lease granted under section 56, means the lease surrendered on the grant of the new lease, and
rights of occupation" has the same meaning as in the Matrimonial Homes Act 1983.

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment clarifies the position when a leaseholder is granted a renewed lease under the provisions of part I of the Leasehold Reform, Housing and Urban Development Act 1993; the charges that applied to the old lease will apply equally to the new one, and with the same priority of interest.

Lords amendment agreed to.

Lords amendments Nos. 128 and 129 agreed to.

Clause 110

INTRODUCTORY TENANCIES

Lords amendment: No. 130, in page 72, line 13, leave out ("have been") and insert ("be")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 131, 132, 141 and 301.

Mr. Curry: This a tidying-up measure, designed to ensure that introductory tenants cannot become secure tenants through default by quitting their tenancies during the introductory period and then returning; or cannot assign their premises to someone and thus endow that other person with a secure tenancy. I believe that the measure commands a consensus.

Lords amendment agreed to.

Lords amendments Nos. 131 and 132 agreed to.

Clause 114

NOTICE OF PROCEEDINGS FOR POSSESSION

Lords amendment: No. 133, in page 73, line 44, leave out from

("section") to end of line 45

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 134 to 137.

Mr. Curry: Some concern was expressed in Committee to the effect that the introductory tenancies internal review might not be as objective or fair as people wanted. We were pressed to give the Secretary of State the power to make regulations that laid down basic guidance to that end. The amendment provides for that. It gives the Secretary of State the power to make regulations that can lay down requirements for the conduct of the internal review.

Mr. Raynsford: The Opposition support amendments Nos. 135 and 136, which are to do with tenants being informed of their rights to request a review. The Minister has referred to provisions that will ensure that such a review is carried out fairly and properly.
The idea of introductory tenancies is attractive to some local authorities—but only to some. Others strongly oppose it. The Government have nevertheless proceeded with the idea, so it is clearly right to introduce safeguards against possible abuse.
Introductory tenancies deny the usual principle of security of tenure to council tenants and enable tenancies to be terminated rapidly if the local authority chooses to do so during the introductory period. Hence it is essential that there be safeguards, because the potential for abuse remains.
There is widespread concern about people who may display characteristics that are not necessarily attractive or likely to make them popular in a particular area.


They might fall foul of the provisions if they were granted a tenancy in such an area. One thinks of people housed under the care in the community provisions, who may be a cause of some concern to residents. One thinks, too, of people from ethnic minorities, who may be the subject of crude prejudice or racism.
If trumped-up complaints were lodged against such people by a majority of tenants in an area who did not want someone with a history of mental illness or with a black face to live there, there would be a real risk of injustice without a proper system of safeguards. That is why we pressed strongly in Committee for adequate time for people to dispute possession actions taken against them. They must have a proper opportunity to have their cases reviewed; such a review should be carried out fairly and reasonably, thus guaranteeing justice.
We therefore welcome the amendments, which provide the security that we think essential if the introductory tenancy concept is to come in without the risk of discrimination or breaches of natural justice.

Lords amendment agreed to.

Lords amendments Nos. 134 to 141 agreed to.

New clause

Lords amendment: No. 142, after clause 123, to insert the following new clause—Jurisdiction of county court—

".—(1) A county court has jurisdiction to determine questions arising under this Chapter and to entertain proceedings brought under this Chapter and claims, for whatever amount, in connection with an introductory tenancy.

(2) That jurisdiction includes jurisdiction to entertain proceedings as to whether a statement supplied in pursuance of section 122(2)(b) (written statement of certain terms of tenancy) is accurate notwithstanding that no other relief is sought than a declaration.

(3) If a person takes proceedings in the High Court which, by virtue of this section, he could have taken in the county court, he is not entitled to recover any costs.

(4) The Lord Chancellor may make such rules and give such directions as he thinks tit for the purpose of giving effect to this section.

(5) The rules and directions may provide—

(a) for the exercise by a district judge of a county court of any jurisdiction exercisable under this section, and
(b) for the conduct of proceedings in private.

(6) The power to make rules is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament."

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to take Lords amendments Nos. 143 to 146, 179, 180, 244, 245, 300 and 305.

Mr. Curry: These are purely technical amendments. No issue of principle or policy is involved—those two being, of course, indivisible.

Lords amendment agreed to.

Lords amendments Nos. 143 to 147 agreed to.

Clause 130

PROCEEDINGS FOR POSSESSION OR TERMINATION

Lords amendment: No. 148, in page 80, line 3, at end insert
("or for the termination of the tenancy, and")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 149 to 156.

Mr. Curry: These are technical amendments. They concern the notice served on tenants by their landlords to obtain possession. They tidy up current provisions and ensure consistency with the notice provisions in the Housing Acts of 1985 and 1988.

Lords amendment agreed to.

Lords amendments Nos. 149 to 156 agreed to.

New clause

Lords amendment: No. 157, before clause 135, to insert the following new clause—Power to grant injunctions against anti-social behaviour—

".—(1) The High Court or a county court may, on an application by a local authority, grant an injunction prohibiting a person from—

(a) engaging in or threatening to engage in conduct causing or likely to cause a nuisance or annoyance to a person residing in, visiting or otherwise engaging in a lawful activity in residential premises to which this section applies or in the locality of such premises,
(b) using or threatening to use residential premises to which this section applies for immoral or illegal purposes, or
(c) entering residential premises to which this section applies or being found in the locality of any such premises.

(2) This section applies to residential premises of the following descriptions—

(a) dwelling-houses held under secure or introductory tenancies from the local authority;
(b) accommodation provided by that authority under Part VII of this Act or Part III of the Housing Act 1985 (homelessness).

(3) The court shall not grant an injunction under this section unless it is of the opinion that—

(a) the respondent has used or threatened to use violence against any person of a description mentioned in subsection (1)(a), and
(b) there is a significant risk of harm to that person or a person of a similar description if the injunction is not granted.

(4) An injunction under this section may—

(a) in the case of an injunction under subsection (1)(a) or (b), relate to particular acts or to conduct, or types of conduct, in general or to both, and
(b) in the case of an injunction under subsection (1)(c), relate to particular premises or a particular locality;
and may be made for a specified period or until varied or discharged.

(5) An injunction under this section may be varied or discharged by the court on an application by—

(a) the respondent, or
(b) the local authority which made the original application.

(6) The court may attach a power of arrest to one or more of the provisions of an injunction which it intends to grant under this section.

(7) The court may, in any case where it considers that it is just and convenient to do so, grant an injunction under this section, or vary such an injunction, even though the respondent has not been given such notice of the proceedings as would otherwise be required by rules of court.

If the court does so, it must afford the respondent an opportunity to make representations relating to the injunction or variation as soon as just and convenient at a hearing of which notice has been given to all the parties in accordance with rules of court.

In this section "local authority" has the same meaning as in the Housing Act 1985."

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to take Lords amendments Nos. 158 to 165 and 302.

Mr. Curry: In Committee in another place, an amendment was tabled to clarify the ability of councils to use section 222 of the Local Government Act 1972 to curb anti-social behaviour. It transpired that some local authorities using that section had obtained legal advice that they would be unwise to rely on the power to restrain anti-social behaviour in premises that they owned, on the ground that there might not be sufficient public interest to justify its use.
It was clear that local authorities harboured some doubts about whether section 222 enabled them to deal with the problem—hence this amendment. The new clause contains an express power to allow councils to obtain an injunction, in the High Court or the county court, to restrain anyone from engaging in anti-social behaviour on council estates. The power is supplemented by a power for the local authority to request a court to attach a power of arrest. That will enable councils to take effective action.
The amendments will be welcomed by local authorities and by the House. The problem of anti-social behaviour is important, and there is broad agreement on the need to find effective ways to deal with it. I hope that this measure will reinforce the available powers.

Mr. Raynsford: Anti-social behaviour is one of the biggest problems facing communities throughout Britain. The problem must be dealt with urgently, and requires serious attention from everyone concerned, whether in central Government or in local government. We need to ensure that local authorities have effective powers to counter the behaviour of a minority of people who cause disproportionate grief and misery to the communities in which they live. The behaviour is often shocking, involving wanton destruction, vandalism and abuse of neighbours—behaviour that is totally incompatible with the normal decencies of human life. Sadly, many local authorities have found it difficult to take effective action against the perpetrators of such behaviour because of the inadequacy of existing legal sanctions and the extraordinary time it often takes to get cases to court and to get appropriate remedies through the courts.
For that reason, in Committee, the Opposition moved a series of amendments that were designed to give local authorities far greater powers to take action against

unruly, disorderly and anti-social elements who terrorise their neighbours, and who make communities hellholes in which it is difficult to lead a normal life. Our proposals envisaged, among other measures, injunctions with the power of arrest, so that a local authority could take effective action against an individual who was causing trouble, without necessarily demonstrating that that person, against whom they had powers to act, was a tenant in the region.
We therefore welcome Lords amendment No. 157, which gives effect to the measures that we were advocating. It gives a local authority the power to seek an injunction against people who are responsible for anti-social behaviour. It enables that injunction to be granted with a power of arrest, so that, if an individual against whom the injunction has been granted subsequently acts in a way that causes anxiety, fear or grief to their community, the authority can seek immediate redress, which is a far more effective deterrent than most.
It is not the whole solution, because other measures are needed to ensure effective action against anti-social behaviour. The long period that it takes to get cases into court requires urgent attention. The difficulties that people encounter because of the reluctance of certain witnesses to come forward because of fear of intimidation and reprisal is another issue. In addition to this amendment, other actions can give greater safety and security to communities.
In government, we will pursue a comprehensive range of measures to bring redress to communities, and to ensure that there is proper sanction against people who make their neighbours' lives a misery and that communities can live in peace and confidence without the fear of their lives being devastated by the actions of a small anti-social minority. Having said that, however, the amendment goes a significant way towards that goal. It gives additional powers. We are delighted that the Government have agreed to our proposals to achieve that, and we therefore warmly endorse the amendment and look forward to its reaching the statute book.

Mrs. Maddock: The amendment is welcomed by all sides, all parties and local authorities, not least because anti-social behaviour has been a great problem. During the passage of the Bill, we have had many discussions on the best way to do it, and giving local authorities the ability to use injunctions against people who behave badly has been the one issue on which there has been agreement. As has been pointed out, however, this applies only to local authority accommodation, and there are problems, particularly on mixed estates. We should be considering, and should have considered, other measures.
We had interesting discussions after the hon. Member for Greenwich (Mr. Raynsford) made some interesting proposals which seemed to me, and I think to others, to go a little beyond the mark in giving local authorities the ability to deal with people without their having to be proved guilty. That struck some of us as going a little too far, but, as he has said, all of us agree that injunctions are valuable. We must, however, recognise that, even if a person can get an injunction, he cannot always get things moving through the courts as quickly as he would like. We will probably have to return to this issue, but, as the hon. Gentleman and others have said, this is a welcome first step. I hope that it will be kept under review and that


the Minister will consider whether other proposals can be made to ensure that it works in the way that he and I hope it will.

Lords amendment agreed to.

Lords amendments Nos. 158 to 165 agreed to.

Clause 142

ALLOCATION OF HOUSING ACCOMMODATION

Lords amendment: No. 166, in page 88, line 40, at end insert ("section 144(1A) or")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 169 to 173, 190 to 197, 303, 323, 325 and 326.

Mr. Curry: We now move to the parts of the Bill reconciling welfare provisions under homelessness with social security provisions as they relate to asylum seekers.
The Government's policy is that no one who is here temporarily or illegally or who is seeking asylum is entitled to housing through the housing register. The same groups are not entitled to homelessness assistance, with the exception of people seeking asylum at the port of entry, who are entitled to homelessness assistance up to the first decision by my right hon. and learned Friend the Home Secretary.
The Court of Appeal found against my right hon. Friend the Secretary of State for Social Security on the ground that he exceeded his powers. The amendments are designed to structure primary legislation to avoid the risk of successful legal challenge in respect of housing legislation. In effect, the prohibitions will apply unless the Secretary of State specifies otherwise by regulation on, for example, people with settled immigration status and people who have been granted refugee status or exceptional leave. The regulations will be made ahead of commencement, so this is a reconciliation measure to ensure that the Bill's provisions equate to the provisions in parallel legislation. I therefore commend the Lords amendments to the House.

Mr. Raynsford: This group of amendments is a shabby illustration of the Government's continued vendetta against asylum seekers—a vendetta which has brought considerable shame on this country internationally and has tarnished our reputation, acquired over 300 years, for being fair and willing to accept people who have suffered torture and discrimination in other countries, and who have been able to seek refuge here. Now we can no longer hold our heads up high in the international community as a country that is willing to welcome people who have suffered appalling torture in other countries.
A week ago tonight, I was speaking about one such person who had come to this country after suffering grotesquely at the hands of the Saddam Hussein regime in Iraq. That person, simply because he arrived in London late at night, confused and frightened, and did not speak any English, failed to make his application for asylum at the port of entry. Because of that, had he applied after 5 February, he would have been treated as a bogus asylum seeker, and would have been denied benefits and

entitlement to any social security assistance or housing. That is a comment on the Government's extraordinarily crude, vindictive and unpleasant values in denying to people who have suffered appallingly elsewhere an opportunity to enter this country, and to be welcomed and helped to establish themselves again on a reasonable footing.
7.30 pm
Previous generations of refugees—from Nazi Germany, the pogroms in Russia and eastern Europe in the 19th century, and even before that from the repression in France against the Huguenots at the time of Louis XIV—were welcomed in Britain. Refugees of today, even if they come from vile regimes like that in Iraq, will be treated in the shabby way that the Government seek to introduce.
In his brief speech, the Minister referred to the Government's defeat in the courts as a result of the implementation of their changed rules affecting asylum seekers. Rather than proposing amendments to the law to overturn the policies that caused those defeats—policies described as draconian in impact—the Government have responded simply by seeking to legitimise the policy that they previously sought to adopt. The amendment is part of that shabby process.
Quite apart from that wider policy background. there are serious reasons for reconsidering the amendment. While asylum seekers who arrive in this country wait for the Home Office to reach a decision on their application for asylum, they cannot register on a housing waiting list. Many must wait for three years or more because of the Home Office's extraordinary inefficiency in processing asylum cases.
In areas where people earn additional points for the time they have been on a waiting list, those individuals will be denied the opportunity to obtain points because they will have been ineligible to register on the waiting list. Although at the end of the process, perhaps three years on, the Home Office may grant them asylum and they will therefore become eligible to go on a waiting list, by the very nature of these restrictions, which will be enforced by the amendment, their chance of being rehoused will be put back by that wait. It will not be the asylum seekers' fault but the fault of the Government, because of their slow processing of asylum cases.
It cannot be right to hit people twice with the double whammy of, first, denying them the opportunity to be considered for housing when they arrive in the country as refugees and, secondly, making them suffer an additional penalty because of the Home Office's failure to process their case expeditiously. I hope that the Government will think again. I fear that they will not. No one can be proud of this chapter in the history of this country's policy towards asylum seekers. It will be frequently recalled in future years as evidence of the Government's inhumanity and political ineptness.

Mrs. Maddock: This is one of the most mean-spirited parts of the Bill. Outside the House there has been incredible lobbying to get the Government to change their minds and ensure that people who flee terrible regimes are dealt with fairly when they arrive on our shores.
There has been widespread support from the Church. It is galling to hear the Government say that we need moral guidance from the Church, yet when the Church gives the Government moral guidance, they choose to ignore it.
We have already heard of the case of people who arrive at a port of entry speaking not a word of English, perhaps having fled from torture and dreadful conditions with their children and family. If they do not do the right thing at the right time, they are penalised for ever more.
This matter has been debated widely and has had a lot of press coverage. It is sad that, at the Bill's final stages, the Government have still not listened. They could at least have promised that they would ensure that the procedures for dealing with people who managed to have their case heard were dealt with quickly. That would have done far more to alleviate the problems of illegal immigrants than this mean-spirited measure. I feel extremely sad about this. The Minister responsible for the Bill is not mean-spirited, and it is unfortunate that he could not persuade his colleagues to do something better.

Lords amendment agreed to.

Lords amendments Nos. 167 to 173 agreed to.

Clause 145

THE HOUSING REGISTER

Lords amendment: No. 174, in page 90, line 16, after ("it") insert ("and other relevant matters")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker: With this, it will be convenient to discuss Lords amendment No. 176.

Mr. Curry: These two small amendments are intended to improve the provisions about the housing register by ensuring that it is sufficiently comprehensive. Amendment No. 174 will ensure that the register contains information not only about the applicant but about other relevant matters—for example, other members of his or her household and the circumstances in which he or she lives. The information will be confidential because of other provisions in the Bill.
Amendment No. 176 would give an authority the discretion to remove someone from its register if he or she asks it to do so, where he or she is owed a duty by that authority under the homelessness provisions. At the moment, the authorities have no option but to remove him or her. It is sensible to give the housing authority that option, as it would remove abuses—for example, people seeking to remove their name from the register and then making a new application.
The amendments are technical but useful improvements to how the register will work, and I invite the House to agree with them.

Lords amendment agreed to.

Clause 146

OPERATION OF HOUSING REGISTER

Lords amendment: No. 175, in page 90, leave out line 24 and insert—

("( ) When a local housing authority put a person on their housing register (on his application or otherwise), they shall notify him that they have done so.")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 177, 178 and 217 to 222.

Mr. Curry: These amendments are more substantial, but I think that the House will wish to agree with them. They show my willingness to reflect on points raised in Committee. Having done so, I decided that some of the arguments were substantial and I therefore invited the other place to agree the amendments. I now invite this House to do the same.
Amendments Nos. 217 to 222 extend the right of internal review to allocations. We are ensuring that there is an effective review procedure.
Amendments Nos. 220 to 222 allow an appeal on homelessness decisions, on a point of law, to the county court following an internal review. In Committee, I was pressed to do this, and I reflected on it. A review should be rapid, effective and fair. I concluded that some ultimate recourse to the county court was sensible for people who felt that the law had not been followed accurately. There are 21 days in which to do that, which I understand is the normal period for the county court.

Mr. Raynsford: As the Minister said, the amendments are an improvement on the original provisions of the Bill and we welcome them. If people are refused access to a local authority housing register, that may have a serious impact on their prospects of securing good-quality accommodation, and they must have an opportunity to challenge a decision to deny them access to the register if they believe that the decision has been taken wrongly or on the basis of incorrect information. An opportunity to appeal, both internally and externally, is proper and correct. We pressed for this right and we are pleased that the Government have agreed that it should be incorporated in the Bill. We warmly welcome the amendments.

Mrs. Maddock: I also warmly welcome the amendments. I have only one comment: we had a discussion at the beginning of today's debate about how thick the amendments are—this measure could have been dealt with a long time ago.

Lords amendment agreed to.

Lords amendments Nos. 176 to 180 agreed to.

Clause 156

HOMELESSNESS AND THREATENED HOMELESSNESS

Lords amendment: No. 181, in page 93, line 30, leave out ("there is") and insert ("he has")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker (Dame Janet Fookes): With this, it will be convenient to discuss Lords amendments Nos. 182 to 186.

Mr. Curry: These are drafting amendments to clarify the law.

Mr. Raynsford: I agree with the Minister, but I cannot allow this opportunity to pass without commenting on the obscure processes of legislation. Essentially, the amendment restores to the first clause of the Bill relating to homelessness, a structure similar to the one that was created in 1977 when the Rent Act first reached the statute book. Those who have followed the processes by which the legislation has been attacked by the Government will know that there has been an on-going battle to defend the principles that lay behind the 1977 legislation.
That Act was a positive and appropriate response to the needs of homeless people, and it provided a framework that has worked well for 18 years. It has ensured that a large number of people have had accommodation—they would have been homeless without it. It is a tragedy that the Government have continued to pursue their vendetta against the homeless by seeking to undermine the provisions of the 1977 legislation.
The only consolation is that, over the past six months or so, we have been able to mitigate, to a modest extent, some of the damage that has been done by the Government. What I find curious about this group of amendments is, as I have already said, that we are now returning to a format similar to the one that was originally proposed in 1977. The legislation starts with a definition of "homelessness" and includes other categories of people who have accommodation but who cannot secure entry to it or who cannot reside in it because of constraints, such as those identified in amendment No. 182.
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Many hon. Members believe that the 1977 legislation should have been left unamended—other than a clarification to ensure that it was interpreted in the way that was originally intended—to guarantee that homeless people receive help in the form of secure accommodation. An element of doubt was cast on that by a judgment in the High Court a year ago. Apart from the need for clarification—to reinstate the original intention of the 1977 legislation—there was absolutely no need to linker with the legislation, and it is a tragedy that the Government have chosen to do so.
This tragedy will affect the lives of many people. The only consolation that we have is the knowledge that the Government's shortsightedness in undermining the homeless legislation is matched only by their short life expectancy. The next Government—a Labour Government—will reinstate a proper framework of responsibility for the relief of homelessness. The Labour party will ensure that the original intentions.of the 1977 legislation are put back on the statute book. Homeless people will have a guarantee of a proper legal framework of responsibilities backed by law to ensure that they are not deserted in their hour of need.

Mr. Peter Thurnham: I ask the Minister to clarify how these amendments will help the homeless, given the number of boarded-up council houses throughout country, particularly in my constituency. I wrote to the Minister last December about the problem of boarded-up council houses in my constituency, and I received a reply from the Under-Secretary on 11 January that assured me that forthcoming legislation would help to meet the problem.
I see absolutely no reason for council houses to be boarded up. It is a tragedy of incompetence. It is no good for housing the homeless; it is no good for the neighbours

of the empty houses, who have to put up with the mess, inconvenience and vandalism that can occur; and it is no good for council tax payers, who should be able to look to earnings from valuable assets instead of the liabilities of leaving the properties empty.
I assure my hon. Friend the Minister that the problem still persists in my constituency. On Friday, I visited Beechcroft grove—I would like the Minister to visit Beechcroft grove. From its name, one would think that it is a pleasant, leafy suburban street. Sadly, when I stood in Beechcroft grove I felt as if I was in Beirut, not in Britain. There are 37 houses, 21 of which are empty and boarded up. What confidence can anyone have in a council that persists in such a dereliction? By coincidence, on the day of my visit, three vans arrived with workmen from the council to start cleaning up the mess in the so-called gardens of the empty properties.
What would my hon. Friend the Minister say to Mr. and Mrs. Harrison, of 27 Beechcroft grove, who have occupied the property for 37 years? It is now surrounded by a desert of derelict properties. Why should they have to pay rent of £1,500 per annum? Would it not be better if they could buy the property under the right-to-buy legislation? It should cost them not much more than £1,500—they should get a full discount on top of the low value of the properties in the area.
I should like the Minister to assure the House that new provisions will provide an opportunity to bring new, caring owners on to such an estate, whether as owner-occupiers or as landlords.
On Friday, I was certainly pleased to visit Beechcroft grove with Mr. John O'Donnell of the North West Landlords Association, who is a good example of a caring landlord, and who certainly would not like to leave his properties empty. Bolton council is for ever pleading poverty, yet there it is with 21 houses that should be worth well over half a million pounds. Presumably those houses are now totally worthless, if not a liability.
I am grateful for the opportunity to mention that issue in the debate. I should be pleased to hear the Minister say that legislation will address the issue and that my constituents Mr. and Mrs. Harrison and their son can look forward to living again in a pleasant Beechcroft grove instead of the derelict mess that it is now.

Mr. Curry: I think that my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) must look to the other Bill on housing—the Housing Grants, Construction and Regeneration Bill—for specific legislative help. That Bill will enable local authorities to use renovation grants in a strategic manner in housing renewal areas. That may be the answer to his specific concerns.
Generally, about 2 per cent. of council houses are vacant, and about 1.1 per cent. are management voids and are available. I agree with my hon. Friend that it is crucial that those houses should be brought into use, and the Government are urging on local authorities an empty property strategy. When we do the annual round of housing investment programmes, we always seek to receive from local authorities effective strategies to do the obvious thing—to bring empty properties into use wherever possible.

Lords amendment agreed to.

Lords amendment Nos. 182 to 186 agreed to.

Clause 157

MEANING OF ACCOMMODATION AVAILABLE FOR OCCUPATION

Lords amendment: No. 187, in page 94, line 11, leave out from ("that") to end of line 13 and insert

("this will lead to domestic violence against him, or against—

(a) a person who normally resides with him as a member of his family, or
(b) any other person who might reasonably be expected to reside with him.

For this purpose "domestic violence", in relation to a person, means violence from a person with whom he is associated, or threats of violence from such a person which are likely to be carried out.")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 188 and 210.

Mr. Curry: The amendments are concerned with the serious issue of domestic violence. During the Bill's passage, hon. Members from both sides of the House expressed their concerns about that issue. In particular, they wanted to ensure that the Bill deals with cases in which violence could be threatened from people who were no longer living with a partner, but with whom there had been a relationship, and that a tenancy could be terminated on those grounds. We have now extended the Bill's scope to encompass a broader definition of domestic violence.
The hon. Member for Hampstead and Highgate (Ms Jackson) was particularly concerned about this issue, as were many of our colleagues who worked on the Bill. I hope that the amendments will address their concerns, and I commend them to the House.

Mr. Raynsford: This is one of the few cases in which an amendment to the Rent Act 1977 was necessary, because the original definition of domestic violence was restricted to violence from some other person living in the property. As the Minister said in his remarks on the amendments, there are circumstances in which people can be subject to domestic violence from a former partner who is no longer resident in the property, or from other people who are not resident there.
Therefore, the changed definition covers violence that might be threatened or perpetrated by a person's associates, who are defined in Lords amendment No. 188. That is a welcome addition to the legislative framework and provides a better basis on which to bring relief to people who are the victims of domestic violence.
The problem is that, once people have been defined as being in a category of those who should be helped, they will not receive the same degree of help that they would have received under the 1977 Act. They may well find that the improvement worked by this group of amendments is entirely illusory because, despite being included in the categories of those to whom assistance should be given, the other changes to the 1977 legislation will nullify that benefit, and they will find that they are consequently no better off.
The amendments are one reason to be happy about changes in the legislation, but it is against a background of negative and destructive changes to the framework for

assisting homeless people. If implemented, the changes will cause a great deal of hardship and many problems to homeless people across Britain.

Mrs. Maddock: As a result of the amendments, important clarification of those who will be protected from all forms of domestic violence will be provided. I hope that the Minister will consider the way in which the clauses operate and whether they do what we hope they will. All those who work with women—but also with men—who suffer from domestic violence will welcome the clarification. However, they will be concerned whether, ultimately, there will be accommodation to enable such people to escape the violence.
I hope that the Minister will examine how the provision will work in practice. As with some of the other amendments that we have considered today, he is giving with one hand in one part of the Bill and taking away with another hand in another part of the Bill. I am quite sure that those who work with people fleeing domestic violence will be watching carefully to see whether the provisions accomplish what we want them to, and I hope that the Minister will also be watching.

Lords amendment agreed to.

Lords amendments Nos. 188 to 197 agreed to.

Clause 167

INTERIM DUTY TO ACCOMMODATE IN CASE OF APPARENT PRIORITY NEED

Lords amendment: No. 198, in page 98, line 15, leave out subsection (4)

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 199 to 201 and 205 to 209.

Mr. Curry: We tabled this group of amendments in response to concerns expressed in another place that clause 196 could be used by less scrupulous authorities as a get-out. The amendments fulfil a commitment to make it clear in the Bill that the authorities must be satisfied that the advice and assistance that they provide is sufficient to enable the applicant to secure accommodation. Therefore, clause 196 is strengthened by ensuring that the authority cannot simply tell someone to go and find accommodation for himself and then declare that the matter is finished.
The other amendments disapply the alternative accommodation provisions in clause 196 in cases in which only a minor duty is owed to households accepted to be homeless.
The reason for the amendments is a wish to ensure that the provisions apply only in certain limited circumstance. We do not wish local authorities to be required to consider whether suitable alternative accommodation is available in every single case.

Mr. Raynsford: The Minister has described the amendments as designed to cover the possibility that some less scrupulous authorities will seek to evade responsibilities to the homeless by use of the original formulation of the alternative accommodation rule.


I prefer to describe such a provision as the "Wandsworth amendment", and it is necessary to stop that authority from interpreting the provisions in a manner that is hostile to the interests of homeless people.
Although the changes are welcome, they do not go far enough. The alternative accommodation loophole remains open, and authorities can still reach a decision that someone is able to find alternative accommodation—because the wording of Lords amendment No. 208 makes it quite clear that the decision ultimately belongs to authorities. The amendment states:
their duty is to provide the applicant with such advice and assistance as the authority consider is reasonably required to enable him to secure such accommodation.
That does not effectively close the loophole against Wandsworth or any similar-minded authorities but will allow an authority that does not want to accept its responsibilities to the homeless to refuse to assist them, on the ground that the authority—and only the authority—considers that it is possible for the applicant to find alternative accommodation. That is a dangerous part of the Bill, and if it were to stay on the statute book any length of time, it would allow local authorities to drive a coach and horses through their responsibilities to the homeless.
The only consolation is that the life expectancy of the changes is short—I have already given a clear sign that a Labour Government will restore a proper statutory framework of responsibility to homeless people that all authorities will have to discharge, including those that are reluctant to do so.

Lords amendment agreed to.

Lords amendments Nos. 199 to 201 agreed to.

Clause 172

DUTY TO PERSONS WITH PRIORITY NEED WHO ARE NOT HOMELESS INTENTIONALLY

Lords amendment: No. 202, in page 100, line 14, at end insert—
("( ) if the applicant was occupying accommodation made available to him under section (Duties to applicant whose case is considered for referral or referred)(3) (interim duty where case considered for referral bat not referred), the date on which he was notified under subsection (2) of that section of the decision that the conditions for referral were not met;")

8 pm

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 203, 211 to 216 and 229.

Mr. Curry: These technical amendments will improve connected clauses.

Lords amendment agreed to.

Lords amendment No. 203 agreed to.

Lords amendment: No. 204, in page 100, line 38, after ("satisfied") insert
("that the accommodation was suitable for him and")

Mr. Curry: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker: With this, it will be convenient to discuss also Lords amendments Nos. 223 to 228, 304 and 324.

Mr. Curry: A lot of concern has been expressed about the Bill's provision to place a duty on local authorities for two years, which would be renewable. It was said that such a duty might be difficult to observe in certain areas of housing stress or in respect of persons requiring particular types of property. After much reflection, I decided to meet some of those concerns.
I am aware that a small number of local authorities could have difficulty, so the amendment provides that, if the Secretary of State is satisfied that a local authority cannot manage, he can make a direction applying to it a 12-month derogation in respect of particular properties or persons. The Secretary of State will set the conditions, in liaison with the housing authorities. That welcome flexibility is at peace with that which I have sought to introduce throughout the Bill where a case for it has been made.

Mr. Raynsford: There can be no clearer illustration of the nonsense in this part of the Bill than this group of amendments. Homeless people need permanent accommodation. The statutory framework that has been in place since 1977 rightly put the emphasis on helping homeless people to secure permanent accommodation. The Government are substituting a concept that only the more loony elements in Conservative Central Office, aided by the extreme fringes of right-wing think tanks, could have devised. Homeless people will have to be shoe-horned into temporary accommodation, even though it is unsatisfactory, more expensive and universally recognised as an inappropriate solution. The Government's dogmatic approach means that temporary accommodation must in the first instance be all that is offered to homeless applicants.
As a result, the Minister found himself in an impossible position. He was presented with evidence from a large number of local authorities, which demonstrated that it was far more sensible to put homeless people in their own housing stock, rather than in temporary accommodation—probably at far greater public expense. The Minister's first response was to allow a limited period—one year—in local authority permanent accommodation. When it was pointed out that it would be ridiculous to evict people from council housing at the end of one year, the Government responded by extending the period to two years.
When it was pointed out that a nonsensical situation would still prevail at the end of the second year, the Government came back with the extraordinary provision, in clause 172, of a Lords amendment that states that, although a local authority will not be permitted to house people in permanent accommodation for more than two years in any three, the Secretary of State may, on the application of a local housing authority, allow it discretion to permit homeless persons to remain in permanent accommodation for a further period, provided that it does not exceed one year.
As with the low-rent test changes, the Government are gradually retreating from an absurd position, to one which is slightly less absurd but still achieves any sensible policy


objective. The amendment represents a modest improvement on a previously thoroughly unsatisfactory provision, but we will not oppose it as it makes more feasible the ability of local authorities to house homeless persons in their own permanent accommodation rather than in expensive temporary accommodation.

Mrs. Maddock: Moving homeless people into local authority housing, only to move them out again, is totally ridiculous. We can see how ridiculous, in legislation that gives the Secretary of State power almost to deal with individual properties. That shows how crazy is the measure.

Lords amendment agreed to.

Lords amendments Nos. 205 to 245 agreed to.

Clause 203

EXTENT

Lords amendment: No. 246, in page 115, line 5, leave out from ("that") to end of line 10 and insert—

("(a) amendments or repeals of provisions of the Housing Associations Act 1985, other than in consequence of paragraph 1 of Schedule 15 to this Act (repeal of Part IV of the Housing Act 1988), do not extend to Scotland,
(b) amendments or repeals of provisions of the Housing Act 1988 relating to registered housing associations do not extend to Scotland,
(c) amendments or repeals of provisions of the Asylum and Immigration Appeals Act 1993 or the Asylum and Immigration Act 1996 do not extend to Scotland or Northern Ireland, and
(d) repeals of the following provisions do not extend to Scotland—

(i) section 24(5)(a) and (c) of the Local Government Act 1988,
(ii) section 182 of the Local Government and Housing Act 1989,
(iii) paragraph 21(3) of Schedule 6 to the Charities Act 1993, and
(iv) provisions in Schedule 26 to the Local Government, Planning and Land Act 1980.")

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker: With this, it will be convenient to discuss Lords amendments Nos. 249, 250 and 327.

Mr. Clappison: These are technical amendments and I ask the House to support them.

Lords amendment agreed to.

Clause 204

COMMENCEMENT

Lords amendments Nos. 247 to 250 agreed to.

Schedule 1

REGISTERED SOCIAL LANDLORDS: REGULATION

Lords amendments Nos. 251 to 269 agreed to.

Schedule 2

SOCIAL RENTED SECTOR: HOUSING COMPLAINTS

Lords amendments Nos. 270 and 271 agreed to.

Schedule 3

SOCIAL RENTED SECTOR: MINOR AMENDMENTS

Lords amendments Nos. 272 and 273 agreed to.

Schedule 3

SOCIAL RENTED SECTOR: MINOR AMENDMENTS

Lords amendment: No. 274, in page 136, leave out lines 42 to 49 and insert—
("Realisation of value of Corporation's loans portfolio.
76A.—(1) The Corporation may, and if so directed by the Secretary of State (under section 76) shall, enter into arrangements of a description approved by the Secretary of State for the purpose of realising the value of the whole or part of its loans portfolio.
(2) The arrangements may provide for—

(a) the transfer of any estate or interest of the Corporation, or
(b) the creation or disposal of economic interests not involving a transfer of an estate or interest,
and may extend to such incidental or ancillary matters as the Corporation or the Secretary of State considers appropriate.
(3) In this section the Corporation's "loans portfolio" means the Corporation's rights and obligations in relation to any loans or related securities.
(4) Nothing in the terms of any loan or related transaction entered into by the Corporation shall be construed as impliedly prohibiting or restricting the Corporation from dealing with its loans portfolio in accordance with arrangements under this section.".)

Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.—[Mr. Curry.]

Madam Deputy Speaker: With this, it will be convenient to discuss Lords amendment No. 276.

Mr. Raynsford: This amendment might be described as the one that sells off the family silver. It is concerned with the disposal of the Housing Corporation's loans portfolio. I rise only to draw attention to widely held fears in the housing world that there will be yet further cuts in the budget for housing association investment in the coming year.
The Government have cut the Housing Corporation's budget in each of the last two years by some £300 million on each occasion, causing enormous damage to the investment programmes of hundreds of housing associations and reducing dramatically the numbers of homes being produced for people in need. If there were to be a further cut in the Housing Corporation's budget in the coming year, that would do even more damage to an already woefully depleted housing programme.
At a time when the Government are giving themselves powers to dispose of the corporation's loans portfolio, it would be a sensible first application of the funds received to restore the cuts in housing association investment programmes to ensure that, in the years ahead, we can


look forward to an expanding programme of social housing, rather than facing yet further reductions in an already hopelessly inadequate housing programme.

Lords amendment agreed to.

Lords amendments Nos. 275 to 277 agreed to. [One with Special Entry.]

Schedule 5

TEXT OF PART II OF THE LANDLORD AND TENANT ACT 1987, AS AMENDED

Lords amendments Nos. 278 to 285 agreed to.

Lords amendment No. 286 disagreed to.

Amendments made in lieu of the Lords amendment: (a), in page 144, line 43, leave out from first `order' to end of line 45 and insert
'subject to this limit, that the fees payable in respect of any one application or reference by the court together with any proceedings before the tribunal arising out of that application or reference shall not exceed £500 or such other amount as may be specified by order of the Secretary of State.'.

(b), in page 145, line 1, leave out 'which, unless the order' and insert—

'( ) No order altering the limit under subsection (3) shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
( ) Any other order under this section, unless it'.—[Mr. Brandreth]

After Schedule 5

Lords amendment: No. 287, after schedule 5, to insert the following new schedule—("SCHEDULE—
AMENDMENTS OF PART I OF THE LANDLORD AND TENANT ACT 1987

PART I

RIGHTS OF FIRST REFUSAL

The following sections are substituted for sections 5 to 10 of the Landlord and Tenant Act 1987—

Rights of first refusal

LANDLORD REQUIRED TO SERVE OFFER NOTICE ON TENANTS

5.—(l) Where the landlord proposes to make a relevant disposal affecting premises to which this Part applies, he shall serve a notice under this section (an "offer notice") on the qualifying tenants of the flats contained in the premises (the "constituent flats").

(2) An offer notice must comply with the requirements of whichever is applicable of the following sections—

section 5A (requirements in case of contract to be completed by conveyance,&amp;c.),
section 5B (requirements in case of sale at auction),
section 5C (requirements in case of grant of option or right of pre—emption);
section 5D (requirements in case of conveyance not preceded by contract, &amp;c.);
and in the case of a disposal to which section 5E applies (disposal for non-monetary consideration) shall also comply with the requirements of that section.

(3) Where a landlord proposes to effect a transaction involving the disposal of an estate or interest in more than one building (whether or not involving the same estate or interest), he shall, for the purpose of complying with this section, sever the transaction so as to deal with each building separately.

(4) If, as a result of the offer notice being served on different tenants on different dates, the period specified in the notice as the period for accepting the offer would end on different dates, the notice shall have effect in relation to all the qualifying tenants on whom it is served as if it provided for that period to end with the latest of those dates.

(5) A landlord who has not served an offer notice on all of the qualifying tenants on whom it was required to be served shall nevertheless be treated as having complied with this section—

(a) if he has served an offer notice on not less than 90% of the qualifying tenants on whom such a notice was required to be served, or
(b) where the qualifying tenants on whom it was required to be served number less than ten, if he has served such a notice on all but one of them.

OFFER NOTICE: REQUIREMENTS IN CASE OF CONTRACT TO BE COMPLETED BY CONVEYANCE, &C

5A.—(1) The following requirements must be met in relation to an offer notice where the disposal consists of entering into a contract to create or transfer an estate or interest in land.

(2) The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular—

(a) the property, and the estate or interest in that property, to which the contract relates,
(b) the principal terms of the contract (including the deposit and consideration required).

(3) The notice must state that the notice constitutes an offer by the landlord to enter into a contract on those terms which may be accepted by the requisite majority of qualifying tenants of the constituent flats.

(4) The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice.

(5) The notice must specify a further period of not less than two months within which a person or persons may be nominated by the tenants under section 6.

(6) This section does not apply to the grant of an option or right of pre-emption (see section 5C).

OFFER NOTICE: REQUIREMENTS IN CASE OF SALE BY AUCTION

5B.—(1) The following requirements must be met in relation to an offer notice where the landlord proposes to make the disposal by means of a sale at a public auction held in England and Wales.

(2) The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular the property to which it relates and the estate or interest in that property proposed to be disposed of.

(3) The notice must state that the disposal is proposed to be made by means of a sale at a public auction.

(4) The notice must state that the notice constitutes an offer by the landlord, which may be accepted by the requisite majority of qualifying tenants of the constituent flats, for the contract (if any) entered into by the landlord at the auction to have effect as if a person or persons nominated by them, and not the purchaser, had entered into it.

(5) The notice must specify a period within which that offer may be so accepted, being a period of not less than two months beginning with the date of service of the notice.

(6) The notice must specify a further period of not less than 28 days within which a person or persons may be nominated by the tenants under section 6.

(7) The notice must be served not less than four months or more than six months before the date of the auction; and—

(a) the period specified in the notice as the period within which the offer may be accepted must end not less than two months before the date of the auction, and
(b) the period specified in the notice as the period within which a person may be nominated under section 6 must end not less than 28 days before the date of the auction.

(8) Unless the time and place of the auction and the name of the auctioneers are stated in the notice, the landlord shall, not less than 28 days before the date of the auction, serve on the requisite majority of qualifying tenants of the constituent flats a further notice stating those particulars.

OFFER NOTICE: REQUIREMENTS IN CASE OF GRANT OR OPTION OR RIGHT OF PRE-EMPTION

5C.—(1) The following requirements must be met in relation to an offer notice where the disposal consists of the grant of an option or right of pre-emption.

(2) The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular—

(a) the property, and the estate or interest in that property, to which the option or right of pre-emption relates,
(b) the consideration required by the landlord for granting the option or right of pre—emption, and
(c) the principal terms on which the option or right of pre—emption would be exercisable, including the consideration payable on its exercise.

(3) The notice must state that the notice constitutes an offer by the landlord to grant an option or right of pre-emption on those terms which may be accepted by the requisite majority of qualifying tenants of the constituent flats.

(4) The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice.

(5) The notice must specify a further period of not less than two months within which a person or persons may be nominated by the tenants under section 6.

OFFER NOTICE: REQUIREMENTS IN CASE OF CONVEYANCE NOT PRECEDED BY CONTRACT, &C

5D.—(1) The following requirements must be met in relation to an offer notice where the disposal is not made in pursuance of a contract, option or right or pre-emption binding on the landlord.

(2) The notice must contain particulars of the principal terms of the disposal proposed by the landlord, including in particular—

(a) the property to which it relates and the estate or interest in that property proposed to be disposed of, and
(b) the consideration required by the landlord for making the disposal.

(3) The notice must state that the notice constitutes an offer by the landlord to dispose of the property on those terms which may be accepted by the requisite majority of qualifying tenants of the constituent flats.

(4) The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice.

(5) The notice must specify a further period of not less than two months within which a person or persons may be nominated by the tenants under section 6.

OFFER NOTICE: DISPOSAL FOR NON-MONETARY CONSIDERATION

5E.—(1) This section applies where, in any case to which section 5 applies, the consideration required by the landlord for making the disposal does not consist, or does not wholly consist, of money.

(2) The offer notice, in addition to complying with whichever is applicable of sections 5A to 5D, must state—

(a) that an election may made under section 8C (explaining its effect), and
(b) that, accordingly. the notice also constitutes an offer by the landlord, which may be accepted by the requisite majority of qualifying tenants of the constituent flats, for a person or persons nominated by them to acquire the property in pursuance of sections 11 to 17.

(3) The notice must specify a period within which that offer may be so accepted, being a period of not less than two months which is to begin with the date of service of the notice.

ACCEPTANCE OF LANDLORD'S OFFER: GENERAL PROVISIONS

6.—(1) Where a landlord has served an offer notice, he shall not during—

(a) the period specified in the notice as the period during which the offer may be accepted, or
(b) such longer period as may be agreed between him and the requisite majority of the qualifying tenants of the constituent flats,
dispose of the protected interest except to a person or persons nominated by the tenants under this section.

(2) Where an acceptance notice is duly served on him, he shall not during the protected period (see subsection (4) below) dispose of the protected interest except to a person duly nominated for the purposes of this section by the requisite majority of qualifying tenants of the constituent flats (a "nominated person").

(3) An "acceptance notice" means a notice served on the landlord by the requisite majority of qualifying tenants of the constituent flats informing him that the persons by whom it is served accept the offer contained in his notice.
An acceptance notice is "duly served" if it is served within—

(a) the period specified in the offer notice as the period within which the offer may be accepted, or
(b) such longer period as may be agreed between the landlord and the requisite majority of qualifying tenants of the constituent flats.

(4) The "protected period" is the period beginning with the date of service of the acceptance notice and ending with—

(a) the end of the period specified in the offer notice as the period for nominating a person under this section, or
(b) such later date as may be agreed between the landlord and the requisite majority of qualifying tenants of constituent flats.

(5) A person is "duly nominated" for the purposes of this section if he is nominated within—

(a) the period specified in the offer notice as the period for nomination, or
(b) such longer period as may be agreed between the landlord and the requisite majority of qualifying tenants of the constituent flats.

(6) A person nominated for the purposes of this section by the requisite majority of qualifying tenants of the constituent flats may be replaced by another person so nominated if, and only if. he has (for any reason) ceased to be able to act as a nominated person.

(7) Where two or more persons have been nominated and any of them ceases to act without being replaced, the remaining person or persons so nominated may continue to act.

FAILURE TO ACCEPT LANDLORD'S OFFER OR TO MAKE NOMINATION

7.—(l) Where a landlord has served an offer notice on the qualifying tenants of the constituent flats and—

(a) no acceptance notice is duly served on the landlord, or
(b) no person is nominated for the purposes of section 6 during the protected period,
the landlord may, during the period of 12 months beginning with the end of that period, dispose of the protected interest to such person as he thinks fit, but subject to the following restrictions.

(2) Where the offer notice was one to which section 5B applied (sale by auction), the restrictions are—

(a) that the disposal is made by means of a sale at a public auction, and
(b) that the other terms correspond to those specified in the offer notice.

(3) In any other case the restrictions are—

(a) that the deposit and consideration required are not less than those specified in the offer notice, and
(b) that the other terms correspond to those specified in the offer notice.

(4) The entitlement of a landlord, by virtue of this section or any other corresponding provision of this Part, to dispose of the protected interest during a specified period of 12 months extends only to a disposal of that interest, and accordingly the requirements of section 1(1) must be satisfied with respect to any other disposal by him during that period of 12 months (unless the disposal is not a relevant disposal affecting any premises to which at the time of the disposal this Part applies).

LANDLORD'S OBLIGATIONS IN CASE OF ACCEPTANCE AND NOMINATION

8.—(1) This section applies where a landlord serves an offer notice on the qualifying tenants of the constituent flat and—

(a) an acceptance notice is duly served on him, and
(b) a person is duly nominated for the purposes of section 6,
by the requisite majority of qualifying tenants of the constituent flats.

(2) Subject to the following provisions of this Part, the landlord shall not dispose of the protected interest except to the nominated person.

(3) The landlord shall, within the period of one month beginning with the date of service of notice of nomination, either—

(a) serve notice on the nominated person indicating an intention no longer to proceed with the disposal of the protected interest, or
(b) be obliged to proceed in accordance with the following provisions of this Part.

(4) A notice under subsection (3)(a) is a notice of withdrawal for the purposes of section 9B(2) to (4) (consequences of notice of withdrawal by landlord).

(5) Nothing in this section shall be taken as prejudicing the application of the provisions of this Part to any further offer. notice served by the landlord on the qualifying tenants of the constituent flats.

LANDLORD'S OBLIGATION: GENERAL PROVISIONS

8A.—(1) This section applies where the landlord is obliged to proceed and the offer notice was not one to which section 5B applied (sale by auction).

(2) The landlord shall, within the period of one month beginning with the date of service of the notice of nomination, send to the nominated person a form of contract for the acquisition of the protected interest on the terms specified in the landlord's offer notice.

(3) If he fails to do so, the following provisions of this Part apply as if he had given notice under section 9B (notice of withdrawal by landlord) at the end of that period.

(4) If the landlord complies with subsection (2), the nominated person shall. within the period of two months beginning with the date on which it is sent or such longer period beginning with that date as may be agreed between the landlord and that person, either—

(a) serve notice on the landlord indicating an intention no longer to proceed with the acquisition of the protected interest, or
(b) offer an exchange of contracts, that is to say, sign the contract and send it to the landlord, together with the requisite deposit.
In this subsection "the requisite deposit" means a deposit of an amount determined by or under the contract or an amount equal to 10 per cent. of the consideration, whichever is the less.

(5) If the nominated person—

(a) serves notice in pursuance of paragraph (a) of subsection (4), or
(b) fails to offer an exchange of contracts within the period specified in that subsection,
the following provisions of this Part apply as if he had given notice under section 9A (withdrawal by nominated person) at the same time as that notice or, as the case may be, at the end of that period.

(6) If the nominated person offers an exchange of contracts within the period specified in subsection (4), but the landlord fails to complete the exchange within the period of seven days beginning with the day on which he received that person's contract, the following provisions of this Part apply as if the landlord had given notice under section 9B (withdrawal by landlord) at the end of that period.

LANDLORD'S OBLIGATION: ELECTION IN CASE OF SALE AT AUCTION

8B.—(1) This section applies where the landlord is obliged to proceed and the offer notice was one to which section 5B applied (sale by auction).

(2) The nominated person may, by notice served on the landlord not less than 28 days before the date of the auction, elect that the provisions of this section shall apply.

(3) If a contract for the disposal is entered into at the auction, the landlord shall, within the period of seven days beginning with the date of the auction, send a copy of the contract to the nominated person.

(4) If, within the period of 28 days beginning with date on which such a copy is so sent, the nominated person—

(a) serves notice on the landlord accepting the terms of the contract, and
(b) fulfils any conditions falling to be fulfilled by the purchaser on entering into the contract,
the contract shall have effect as if the nominated person, and not the purchaser, had entered into the contract.

(5) Unless otherwise agreed, any time limit in the contract as it has effect by virtue of subsection (4) shall start to run again on the service of notice under that subsection; and nothing in the contract as it has effect by virtue of a notice under this section shall require the nominated person to complete the purchase before the end of the period of 28 days beginning with the day on which he is deemed to have entered into the contract.

(6) If the nominated person—

(a) does not serve notice on the landlord under subsection (2) by the time mentioned in that subsection, or
(b) does not satisfy the requirements of subsection (4) within the period mentioned in that subsection,
the following provisions of this Part apply as if he had given notice under section 9A (withdrawal by nominated person) at the end of that period.

ELECTION IN CASE OF DISPOSAL FOR NON-MONETARY CONSIDERATION

8C.—(1) This section applies where an acceptance notice is duly served on the landlord indicating an intention to accept the offer referred to in section 5E (offer notice: disposal for non-monetary consideration).

(2) The requisite majority of qualifying tenants of the constituent flats may, by notice served on the landlord within—

(a) the period specified in the offer notice for nominating a person or persons for the purposes of section 6, or
(b) such longer period as may be agreed between the landlord and the requisite majority of qualifying tenants of the constituent flats,
elect that the following provisions shall apply.

(3) Where such an election is made and the landlord disposes of the protected interest on terms corresponding to those specified in his offer notice in accordance with section 5A, 5B, 5C or 5D, sections 11 to 17 shall have effect as if—

(a) no notice under section 5 had been served;
(b) in section 11A(3) (period for serving notice requiring information, &amp;c.), the reference to four months were a reference to 28 days; and
(c) in section 12A(2) and 12B(3) (period for exercise of tenants' rights against purchaser) each reference to six months were a reference to two months.

(4) For the purposes of sections 11 to 17 as they have effect by virtue of subsection (3) so much of the consideration for the original disposal as did not consist of money shall be treated as such amount in money as was equivalent to its value in the hands of the landlord.

The landlord or the nominated person may apply to have that amount determined by a leasehold valuation tribunal.

DISPOSAL IN PURSUANCE OF OPTION OR RIGHT OF PRE-EMPTION

8D.—(1) Where—

(a) the original disposal was the grant of an option or right of pre—emption, and
(b) in pursuance of the option or right, the landlord makes another disposal affecting the premises ("the later disposal") before the end of the period specified in subsection (2),
sections 11 to 17 shall have effect as if the later disposal, and not the original disposal, were the relevant disposal.

(2) The period referred to in subsection (1)(b) is the period of four months beginning with the date by which—

(a) notices under section 3A of the Landlord and Tenant Act 1985 (duty of new landlord to inform tenants of rights) relating to the original disposal, or
(b) where that section does not apply, documents of any other description—

(i) indicating that the original disposal has taken place, and
(ii) alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised,
have been served on the requisite majority of qualifying tenants of the constituent flats.

8E.—(1) Where the landlord is obliged to proceed but is precluded by a covenant, condition or other obligation from disposing of the protected interest to the nominated person unless the consent of some other person is obtained—

(a) he shall use his best endeavours to secure that the consent of that person to that disposal is given, and
(b) if it appears to him that that person is obliged not to withhold his consent unreasonably but has nevertheless so withheld it, he shall institute proceedings for a declaration to that effect.

(2) Subsection (1) ceases to apply if a notice of withdrawal is served under section 9A or 9B (withdrawal of either party from transaction) or if notice is served under section 10 (lapse of landlord's offer: premises ceasing to be premises to which this Part applies).

(3) Where the landlord has discharged any duty imposed on him by subsection (1) but any such consent as is there mentioned has been withheld, and no such declaration as is there mentioned has been made, the landlord may serve a notice on the nominated person stating that to be the case.

When such a notice has been served, the landlord may, during the period of 12 months beginning with the date of service of the notice, dispose of the protected interest to such person as he thinks fit, but subject to the following restrictions.

(4) Where the offer notice was one to which section 5B applied (sale by auction), the restrictions are—

(a) that the disposal is made by means of a sale at a public auction, and
(b) that the other terms correspond to those specified in the offer notice.

(5) In any other case the restrictions are—

(a) that the deposit and consideration required are not less than those specified in the offer notice or, if higher, those agreed between the landlord and the nominated person (subject to contract), and
(b) that the other terms correspond to those specified in the offer notice.

(6) Where notice is given under subsection (3), the landlord may recover from the nominated party and the qualifying tenants who served the acceptance notice any costs reasonably incurred by him in connection with the disposal between the end of the first four weeks of the nomination period and the time when that notice is served by him.

Any such liability of the nominated person and those tenants is a joint and several liability.

NOTICE. OF WITHDRAWAL BY NOMINATED PERSON

9A.—(1) Where the landlord is obliged to proceed, the nominated person may serve notice on the landlord (a "notice of withdrawal") indicating his intention no longer to proceed with the acquisition of the protected interest.

(2) If at any time the nominated person becomes aware that the number of the qualifying tenants of the constituent flats desiring to proceed with the acquisition of the protected interest is less than the requisite majority of qualifying tenants of those flats, he shall forthwith serve a notice of withdrawal.

(3) Where notice of withdrawal is given by the nominated person under this section, the landlord may, during the period of 12 months beginning with the date of service of the notice, dispose of the protected interest to such person as he thinks fit, but subject to the following restrictions.

(4) Where the offer notice was one to which section 5B applied (sale by auction), the restrictions are—

(a) that the disposal is made by means of a sale at a public auction, and
(b) that the other terms correspond to those specified in the offer notice.

(5) In any other case the restrictions are—

(a) that the deposit and consideration required are not less than those specified in the offer notice or, if higher, those agreed between the landlord and the nominated person (subject to contract). and
(b) that the other terms correspond to those specified in the offer notice.

(6) If notice of withdrawal is served under this section before the end of the first four weeks of the nomination period specified in the offer notice, the nominated person and the qualifying tenants who served the acceptance notice are not liable for any costs incurred by the landlord in connection with the disposal.

(7) If notice of withdrawal is served under this section after the end of those four weeks, the landlord may recover from the nominated person and the qualifying tenants who served the acceptance notice any costs reasonably incurred by him in connection with the disposal between the end of those four weeks and the time when the notice of withdrawal was served on him.

Any such liability of the nominated person and those tenants is a joint and several liability.

(8) This section does not apply after a binding contract for the disposal of the protected interest—

(a) has been entered into by the landlord and the nominated person, or
(b) has otherwise come into existence between the landlord and the nominated person by virtue of any provision of this Part.

NOTICE. OF WITHDRAWAL BY LANDLORD

9B.—(1) Where the landlord is obliged to proceed, he may serve notice on the nominated person (a "notice of withdrawal") indicating his intention no longer to proceed with the disposal of the protected interest.

(2) Where a notice of withdrawal is given by the landlord, he is not entitled to dispose of the protected interest during the period of 12 months beginning with the date of service of the notice.

(3) If a notice of withdrawal is served before the end of the first four weeks of the nomination period specified in the offer notice, the landlord is not liable for any costs incurred in connection with the disposal by the nominated person and the qualifying tenants who served the acceptance notice.

(4) If a notice of withdrawal is served after the end of those four weeks, the nominated person and the qualifying tenants who served the acceptance notice may recover from the landlord any costs reasonably incurred by them in connection with the disposal between the end of those four weeks and the time when the notice of withdrawal was served.

(5) This section does not apply after a binding contract for the disposal of the protected interest—

(a) has been entered into by the landlord and the nominated person, or
(b) has otherwise come into existence between the landlord and the nominated person by virtue of any provision of this Part.

LAPSE OF LANDLORD'S OFFER

10.—(1) If after a landlord has served an offer notice the premises concerned cease to be premises to which this Part applies, the landlord may serve a notice on the qualifying tenants of the constituent flats stating—

(a) that the premises have ceased to be premises to which this Part applies, and
(b) that the offer notice, and anything done in pursuance of it, is to be treated as not having been served or done;
and on the service of such a notice the provisions of this Part cease to have effect in relation to that disposal.

(2) A landlord who has not served such a notice on all of the qualifying tenants of the constituent flats shall nevertheless be treated as having duly served a notice under subsection (1)—

(a) if he has served such a notice on not less than 90 per cent of those tenants, or
(b) where those qualifying tenants number less than ten, if he has served such a notice on all but one of them.

(3) Where the landlord is entitled to serve a notice under subsection (1) but does not do so, this Part shall continue to have effect in relation to the disposal in question as if the premises in question were still premises to which this Part applies.

(4) The above provisions of this section do not apply after a binding contract for the disposal of the protected interest—

(a) has been entered into by the landlord and the nominated person, or
(b) has otherwise come into existence between the landlord and the nominated person by virtue of any provision of this Part.

(5) Where a binding contract for the disposal of the protected interest has been entered into between the landlord and the nominated person but it has been lawfully rescinded by the landlord, the landlord may, during the period of 12 months beginning with the date of the rescission of the contract, dispose of that interest to such person (and on such terms) as he thinks fit.".

PART II

ENFORCEMENT BY TENANTS OF RIGHTS AGAINST PURCHASER

The following sections are substituted for sections 11 to 15 of the Landlord and Tenant Act 1987—
"Enforcement by tenants of rights against purchaser

CIRCUMSTANCES IN WHICH TENANTS' RIGHTS ENFORCEABLE AGAINST PURCHASER

11.—(1) The following provisions of this Part apply where a landlord has made a relevant disposal affecting premises to which at the time of the disposal this Part applied ("the original disposal"), and either—

(a) no notice was served by the landlord under section 5 with respect to that disposal, or
(b) the disposal was made in contravention of any provision of sections 6 to 10,
and the premises are still premises to which this Part applies.

(2) In those circumstances the requisite majority of the qualifying tenants of the flats contained in the premises affected by the relevant disposal (the "constituent flats") have the rights conferred by the following provisions—

section 11A (right to information as to terms of disposal, &amp;c.),
section 12A (right of qualifying tenants to take benefit of contract),
section 12B (right of qualifying tenants to compel sale, &amp;c. by purchaser), and
section 12C (right of qualifying tenants to compel grant of new tenancy by superior landlord).

(3) In those sections the transferee under the original disposal (or, in the case of the surrender of a tenancy, the superior landlord) is referred to as "the purchaser".

This shall not be read as restricting the operation of those provisions to disposals for consideration.

RIGHT TO INFORMATION AS TO TERMS OF DISPOSAL, &C

11 A.—(1) The requisite majority of qualifying tenants of the constituent flats may serve a notice on the purchaser requiring him—

(a) to give particulars of the terms on which the original disposal was made (including the deposit and consideration required) and the date on which it was made, and
(b) where the disposal consisted of entering into a contract, to provide a copy of the contract.

(2) The notice must specify the name and address of the person to whom (on behalf of the tenants) the particulars are to be given, or the copy of the contract provided.

(3) Any notice under this section must be served before the end of the period of four months beginning with the date by which—

(a) notices under section 3A of the Landlord and Tenant Act 1985 (duty of new landlord to inform tenants of rights) relating to the original disposal, or
(b) where that section does not apply, documents of any other description—

(i) indicating that the original disposal has taken place, and
(ii) alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised,
have been served on the requisite majority of qualifying tenants of the constituent flats.

(4) A person served with a notice under this section shall comply with it within the period of one month beginning with the date on which it is served on him.

RIGHT OF QUALIFYING TENANTS TO TAKE BENEFIT OF CONTRACT

12A.—(1) Where the original disposal consisted of entering into a contract, the requisite majority of qualifying tenants of the constituent flats may by notice to the landlord elect that the contract shall have effect as if entered into not with the purchaser but with a person or persons nominated for the purposes of this section by the requisite majority of qualifying tenants of the constituent flats.

(2) Any such notice must be served before the end of the period of six months beginning—

(a) if a notice was served on the purchaser under section 11A (right to information as to terms of disposal, &amp;c.), with the date on which the purchaser complied with that notice;
(b) in any other case, with the date by which documents of any description—

(i) indicating that the original disposal has taken place, and


(ii) alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised,
have been served on the requisite majority of qualifying tenants of the constituent flats.

(3) The notice shall not have effect as mentioned in subsection (1) unless the nominated person—

(a) fulfils any requirements as to the deposit required on entering into the contract, and
(b) fulfils any other conditions required to be fulfilled by the purchaser on entering into the contract.

(4) Unless otherwise agreed, any time limit in the contract as it has effect by virtue of a notice under this section shall start to run again on the service of that notice; and nothing in the contract as it has effect by virtue of a notice under this section shall require the nominated person to complete the purchase before the end of the period of 28 days beginning with the day on which he is deemed to have entered into the contract.

(5) Where the original disposal related to other property in addition to premises to which this Part applied at the time of the disposal—

(a) a notice under this section has effect only in relation to the premises to which this Part applied at the time of the original disposal, and
(b) the terms of the contract shall have effect with any necessary modifications.

In such a case the notice under this section may specify the subject-matter of the disposal, and the terms on which the disposal is to be made (whether doing so expressly or by reference to the original disposal), or may provide for that estate or interest, or any such terms, to be determined by a leasehold valuation tribunal.

12B.—(1) This section applies where—

(a) the original disposal consisted of entering into a contract and no notice has been served under section 12A (right of qualifying tenants to take benefit of contract), or
(b) the original disposal did not consist of entering into a contract.

(2) The requisite majority of qualifying tenants of the constituent flats may serve a notice (a "purchase notice") on the purchaser requiring him to dispose of the estate or interest that was the subject—matter of the original disposal, on the terms on which it was made (including those relating to the consideration payable), to a person or persons nominated for the purposes of this section by any such majority of qualifying tenants of those flats.

(3) Any such notice must be served before the end of the period of six months beginning—

(a) if a notice was served on the purchaser under section 11A (right to information as to terms of disposal, &amp;c.), with the date on which the purchaser complied with that notice;
(b) in any other case, with the date by which—

(i) notices under section 3A of the Landlord and Tenant Act 1985 (duty of new landlord to inform tenants of rights) relating to the original disposal, or
(ii) where that section does not apply, documents of any other description indicating that the original disposal has taken place, and alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised,
have been served on the requisite majority of qualifying tenants of the constituent flats.

(4) A purchase notice shall where the original disposal related to other property in addition to premises to which this Part applied at the time of the disposal—

(a) require the purchaser only to make a disposal relating to those premises, and
(b) require him to do so on the terms referred to in subsection (2) with any necessary modifications.

In such a case the purchase notice may specify the subject—matter of the disposal, and the terms on which the disposal is to be made (whether doing so expressly or by reference to the original disposal), or may provide for those matters to be determined by a leasehold valuation tribunal.

(5) Where the property which the purchaser is required to dispose of in pursuance of the purchase notice has since the original disposal become subject to any charge or other incumbrance, then, unless the court by order directs otherwise—

(a) in the case of a charge to secure the payment of money or the performance of any other obligation by the purchaser or any other person, the instrument by virtue of which the property is disposed of by the purchaser to the person or persons nominated for the purposes of this section shall (subject to the provisions of Part I of Schedule 1) operate to discharge the property from that charge; and
(b) in the case of any other incumbrance, the property shall be so disposed of subject to the incumbrance but with a reduction in the consideration payable to the purchaser corresponding to the amount by which the existence of the incumbrance reduces the value of the property.

(6) Subsection (5)(a) and Part I of Schedule 1 apply, with any necessary modifications, to mortgages and liens as they apply to charges; but nothing in those provisions applies to a rent charge.

(7) Where the property which the purchaser is required to dispose of in pursuance of the purchase notice has since the original disposal increased in monetary value owing to any change in circumstances (other than a change in the value of money), the amount of the consideration payable to the purchaser for the disposal by him of the property in pursuance of the purchase notice shall be the amount that might reasonably have been obtained on a corresponding disposal made on the open market at the time of the original disposal if the change in circumstances had already taken place.

RIGHT OF QUALIFYING TENANTS TO COMPEL GRANT OF NEW TENANCY BY SUPERIOR LANDLORD

12C.—(1) This section applies where the original disposal consisted of the surrender by the landlord of a tenancy held by him ("the relevant tenancy").

(2) The requisite majority of qualifying tenants of the constituent flats may serve a notice on the purchaser requiring him to grant a new tenancy of the premises which were subject to the relevant tenancy, on the same terms as those of the relevant tenancy and so as to expire on the same date as that tenancy would have expired, to a person or persons nominated for the purposes of this section by any such majority of qualifying tenants of those flats.

(3) Any such notice must be served before the end of the period of six months beginning—

(a) if a notice was served on the purchaser under section 11A (right to information as to terms of disposal, &amp;c.), with the date on which the purchaser complied with that notice;
(b) in any other case, with the date by which documents of any description—

(i) indicating that the original disposal has taken place, and
(ii) alerting the tenants to the existence of their rights under this Part and the time within which any such rights must be exercised,
have been served on the requisite majority of qualifying tenants of the constituent flats.

(4) If the purchaser paid any amount to the landlord as consideration for the surrender by him of that tenancy, the nominated person shall pay that amount to the purchaser.

(5) Where the premises subject to the relevant tenancy included premises other than premises to which this Part applied at the time of the disposal, a notice under this section shall—

(a) require the purchaser only to grant a new tenancy relating to the premises to which this Part then applied, and


(b) require him to do so on the terms referred to in subsection (2) subject to any necessary modifications.

(6) The purchase notice may specify the subject—matter of the disposal, and the terms on which the disposal is to be made (whether doing so expressly or by reference to the original disposal), or may provide for those matters to be determined by a leasehold valuation tribunal.

NOMINATED PERSONS: SUPPLEMENTARY PROVISIONS

12D.—(1) The person or persons initially nominated for the purposes of section 12A. 12B or 12C shall be nominated in the notice under that section.

(2) A person nominated for those purposes by the requisite majority of qualifying tenants of the constituent flats may be replaced by another person so nominated if, and only if, he has (for any reason) ceased to be able to act as a nominated person.

(3) Where two or more persons have been nominated and any of them ceases to act without being replaced, the remaining person or persons so nominated may continue to act.

(4) Where, in the exercise of its power to award costs, the court or the Lands Tribunal makes, in connection with any proceedings arising under or by virtue of this Part, an award of costs against the person or persons so nominated, the liability for those costs is a joint and several liability of that person or those persons together with the qualifying tenants by whom the relevant notice was served.

DETERMINATION OF QUESTIONS BY LEASEHOLD VALUATION TRIBUNAL

13.—(1) A leasehold valuation tribunal has jurisdiction to hear and determine—

(a) any question arising in relation to any matters specified in a notice under section 12A, 12B or 12C, and
(b) any question arising for determination as mentioned in section 8C(4), 12A(5) or 12B(4) (matters left for determination by tribunal).

(2) On an application under this section the interests of the persons by whom the notice was served under section 12A, 12B or 12C shall be represented by the nominated person; and accordingly the parties to any such application shall not include those persons.

WITHDRAWAL OF NOMINATED PERSON FROM TRANSACTION UNDER s.12B OR 12C

14.—(1) Where notice has been duly served on the landlord under—

section 12B (right of qualifying tenants to compel sale, &amp;c. by purchaser), or
section 12C (right of qualifying tenants to compel grant of new tenancy by superior landlord),
the nominated person may at any time before a binding contract is entered into in pursuance of the notice, serve notice under this section on the purchaser (a "notice of withdrawal") indicating an intention no longer to proceed with the disposal.

(2) If at any such time the nominated person becomes aware that the number of qualifying tenants of the constituent flats desiring to proceed with the disposal is less than the requisite majority of those tenants, he shall forthwith serve a notice of withdrawal.

(3) If a notice of withdrawal is served under this section the purchaser may recover from the nominated person any costs reasonably incurred by him in connection with the disposal down to the time when the notice is served on him.

(4) If a notice of withdrawal is served at a time when proceedings arising under or by virtue of this Part are pending before the court or the Lands Tribunal, the liability of the nominated person for any costs incurred by the purchaser as mentioned in subsection (3) shall be such as may be determined by the court or (as the case may be) by the Tribunal.

(5) The costs that may be recovered by the purchaser under this section do not include any costs incurred by him in connection with an application to a leasehold valuation tribunal.".

PART III

ENFORCEMENT OF RIGHTS AGAINST SUBSEQUENT PURCHASERS AND TERMINATION OF RIGHTS

The following sections replace sections 16 and 17 of the Landlord and Tenant Act 1987–
"Enforcement by tenants of rights against subsequent purchasers

RIGHTS OF QUALIFYING TENANTS AGAINST SUBSEQUENT PURCHASER

16.—(1) This section applies where, at the time when a notice is served on the purchaser under section 11A, 12A, 12B or 12C, he no longer holds the estate or interest that was the subject—matter of the original disposal.

(2) In the case of a notice under section 11A (right to information as to terms of disposal, &c.) the purchaser shall, within the period for complying with that notice

(a) serve notice on the person specified in the notice as the person to whom particulars are to be provided of the name and address of the person to whom he has disposed of that estate or interest ("the subsequent purchaser"), and
(b) serve on the subsequent purchaser a copy of the notice under section 11A and of the particulars given by him in response to it.

(3) In the case of a notice under section 12A. 12B or 12C the purchaser shall forthwith—

(a) forward the notice to the subsequent purchaser, and
(b) serve on the nominated person notice of the name and address of the subsequent purchaser.

(4) Once the purchaser serves a notice in accordance with subsection (2)(a) or (3)(b), sections 12A to 14 shall, instead of applying to the purchaser, apply to the subsequent purchaser as if he were the transferee under the original disposal.

(5) Subsections (1) to (4) have effect, with any necessary modifications, in a case where, instead of disposing of the whole of the estate or interest referred to in subsection (1) to another person, the purchaser has disposed of it in part or in parts to one or more other persons.

In such a case, sections 12A to 14–

(a) apply to the purchaser in relation to any part of that estate or interest retained by him, and
(b) in relation to any part of that estate or interest disposed of to any other person, apply to that other person instead as if he were (as respects that part) the transferee under the original disposal.

Termination of rights against purchasers or subsequent purchasers

TERMINATION OF RIGHTS AGAINST PURCHASER OR SUBSEQUENT PURCHASER

17.—(1) If, at any time after a notice has been served under section 11A, 12A, 12B or 12C, the premises affected by the original disposal cease to be premises to which this Part applies, the purchaser may serve a notice on the qualifying tenants of the constituent flats stating—

(a) that the premises have ceased to be premises to which this Part applies, and
(b) that any such notice served on him, and anything done in pursuance of it, is to be treated as not having been served or done.

(2) A landlord who has not served such a notice on all of the qualifying tenants of the constituent flats shall nevertheless be treated as having duly served a notice under subsection (1)—

(a) if he has served such a notice on not less than 90% of those tenants, or
(b) where those qualifying tenants number less than ten, if he has served such a notice on all but one of them.

(3) Where a period of three months beginning with the date of service of a notice under section 12A, 12B or 12C on the purchaser has expired—

(a) without any binding contract having been entered into between the purchaser and the nominated person, and
(b) without there having been made any application in connection with the notice to the court or to a leasehold valuation tribunal,
the purchaser may serve on the nominated person a notice stating that the notice, and anything done in pursuance of it, is to be treated as not having been served or done.

(4) Where any such application as is mentioned in subsection (3)(b) was made within the period of three months referred to in that subsection, but—

(a) a period of two months beginning with the date of the determination of that application has expired,
(b) no binding contract has been entered into between the purchaser and the nominated person, and
(c) no other such application as is mentioned in subsection (3)(b) is pending,
the purchaser may serve on the nominated person a notice stating that any notice served on him under section 12A, 12B or 12C, and anything done in pursuance of any such notice, is to be treated as not having been served or done.

(5) Where the purchaser serves a notice in accordance with subsection (1), (3) or (4), this Part shall cease to have effect in relation to him in connection with the original disposal.

(6) Where a purchaser is entitled to serve a notice under subsection (1) but does not do so, this Part shall continue to have effect in relation to him in connection with the original disposal as if the premises in question were still premises to which this Part applies.

(7) References in this section to the purchaser include a subsequent purchaser to whom sections 12A to 14 apply by virtue of section 16(4) or (5).".

PART IV

CONSEQUENTIAL AMENDMENTS

1. In section 4(2) of the Landlord and Tenant Act 1987 ((relevant disposals: excluded disposals), in paragraph (aa) (disposals by way of security for a loan) omit the words "consisting of the creation of an estate or interest".

2. Before section 19 of the Landlord and Tenant Act 1987, under the heading "Supplementary provisions", insert—
"The requisite majority of qualifying tenants.

18A.—(1) In this Part "the requisite majority of qualifying tenants of the constituent flats" means qualifying tenants of constituent flats with more than 50 per cent. of the available votes.

(2) The total number of available votes shall be determined as follows—

(a) where an offer notice has been served under section 5, that number is equal to the total number of constituent flats let to qualifying tenants on the date when the period specified in that notice as the period for accepting the offer expires;
(b) where a notice is served under section 11A without a notice having been previously served under section 5, that number is equal to the total number of constituent flats let to qualifying tenants on the date of service of the notice under section 11A;
(c) where a notice is served under section 12A, 12B or 12C without a notice having been previously served under section 5 or section 11A, that number is equal to the total number of constituent flats let to qualifying tenants on the date of service of the notice under section 12A, 12B or 12C, as the case may be.

(3) There is one available vote in respect of each of the flats so let on the date referred to in the relevant paragraph of subsection (2), which shall be attributed to the qualifying tenant to whom it is let.

(4) The persons constituting the requisite majority of qualifying tenants for one purpose may be different from the persons constituting such a majority for another purpose.".

3.—(1) Section 20(1) of the Landlord and Tenant Act 1987 (interpretation of Part I) is amended as follows.

(2) For the definition of "acceptance notice" substitute—
"acceptance notice" has the meaning given by section 6(3);".

(3) For the definition of "constituent flat" substitute—
"constituent flat" shall be construed in accordance with section 5(1) or 11(2), as the case may require;".

(4) Omit the definition of "the new landlord".

(5) After that definition insert—
"the nominated person" means the person or persons for the time being nominated by the requisite majority of the qualifying tenants of the constituent flats for the purposes of section 6, 12A, 12B or 12C, as the case may require;".

(6) For the definition of "the protected interest" substitute—
"the protected interest" means the estate, interest or other subject—matter of an offer notice;".

(7) After that definition insert—
"the protected period" has the meaning given by section 6(4);".

(8) For the definition of "purchase notice" substitute—
"Purchase notice" has the meaning given by section 12B(2);".

(9) After that definition insert—
"purchaser" has the meaning given by section 11(3);".

(10) In the definition of "the requisite majority" for "section 5(6) and (7) substitute "section 18A".

4. In section 20(2) of the Landlord and Tenant Act 1987, omit the words "or counter—offer" in each place where they occur.

5. In Part III of the Landlord and Tenant Act 1987 (compulsory acquisition by tenants of their landlord's interest), in section 31 (determination of terms by rent assessment committees)—

(a) for "rent assessment committee", wherever occurring, substitute "leasehold valuation tribunal";
(b) for "such a committee" or "the committee", wherever occurring, substitute "the tribunal"; and
(c) omit subsection (5).

6. In section 52(1) of the Landlord and Tenant Act 1987 (jurisdiction of county courts) for "rent assessment committee" substitute "leasehold valuation tribunal".

7. After section 52 of the Landlord and Tenant Act 1987 insert—
"Jurisdiction of leasehold valuation tribunal under Part I or III.

52A.—(1) Any jurisdiction conferred by Part I or III of this Act on a leasehold valuation tribunal is exercisable by a rent assessment committee constituted in accordance with Schedule 10 to the Rent Act 1977 which when so constituted for the purposes of exercising any such jurisdiction shall be known as a leasehold valuation tribunal.

(2) The power to make regulations under section 74(1)(b) of the Rent Act 1977 (procedure of rent assessment committees) extends to prescribing the procedure to be followed in connection with any proceedings before a leasehold valuation tribunal under this Act.

(3) Any application under this Act to a leasehold valuation tribunal must be in such form, and contain such particulars, as the Secretary of State may by regulations prescribe.

(4) Any costs incurred by a party to any such application in connection with the application shall be borne by that party.

(5) Paragraphs 1, 2, 3 and 7 of Schedule 22 to the Housing Act 1980 (supplementary provisions relating to leasehold valuation tribunals: constitution, appeals and provision of information) apply to a leasehold valuation tribunal constituted for the purposes of this section.".

8 In section 53(2)(b) of the Landlord and Tenant Act 1987 (regulations subject to negative resolution), for the words from "section 13(2)" to "section 31)" substitute "section 52A(3)".

9 In section 54(4) of the Landlord and Tenant Act 1987 (saving for power under section 20(4)) for "either of the periods specified in section 5(2)" substitute "any of the periods specified in section 5A(4) or (5), 5B(5) or (6), 5C(4) or (5), 5D(4) or (5) or 5E(3)".

10 In section 60(1) of the Landlord and Tenant Act 1987 (general interpretation), omit the definition of "rent assessment committee".

11–(1) In Schedule 1 of the Landlord and Tenant Act 1987 (discharge of mortgages, &c), in paragraph 1 (construction of provisions relating to discharge in pursuance of purchase notice)—

(a) for the words "the new landlord" wherever they appear substitute "the purchaser";
(b) in the definition of "consideration payable"—

(i) for the words "section 12(4)" substitute "section 12B(7)", and
(ii) for the words "section 16(2) or (3)" substitute "section 16(4) or (5)";
(c) in the definition of "nominated person", for the words "section 12(1)" substitute "section 12B(2)".

(2) In paragraphs 2, 4 and 5 of that Schedule (duty of nominated person to redeem mortgages, payments into court and savings)—

(a) for the words "section 12(4)(a)" wherever they appear substitute "section 12B(5)(a)";
(b) for the words "the new landlord" or "the new landlord's" wherever they appear substitute "the purchaser" or "the purchaser's".")

Amendment made to the Lords amendment: (a), in line 183, leave out 'within' and insert
'at the same time as the acceptance notice is served or at any time after that notice is served and before the end of—'—[Mr. Brandreth.]

Lords amendment, as amended, agreed to.

Schedule 8

Low RENT TEST: EXTENSION OF RIGHTS

Lords amendment: No. 288, in page 148, line 4, leave out ("fifty") and insert ("thirty-five")

Amendment proposed to the Lords amendment: (a), Leave out 'thirty-five' and insert `twenty-one'.—[Mr. Raynsford.]

Question put, That the amendment to the Lords amendment be made:—

The House divided: Ayes 119, Noes 239.

Division No. 209]
[8.16 pm


AYES


Ainger, Nick
Benn, Tony


Ainsworth, Robert (Cov'try NE)
Bermingham, Gerald


Alton, David
Betts, Clive


Anderson, Ms Janet (Ros'dale)
Bradley, Keith


Ashdown, Paddy
Bray, Dr Jeremy


Ashton, Joseph
Brown, Gordon (Dunfermline E)


Austin-Walker, John
Brown, Nicholas (Newcastle E)


Barnes, Harry
Callaghan, Jim





Campbell, Mrs Anne (C'bridge)
McAvoy, Thomas


Campbell, Ronnie (Blyth V)
Macdonald, Calum


Campbell-Savours, D N
McKelvey, William


Chisholm, Malcolm
Madden, Max


Clapham, Michael
Maddock, Mrs Diana


Clark, Dr David (S Shields)
Mahon, Mrs Alice


Clelland, David
Marshall, David (Shettleton)


Clwyd, Mrs Ann
Martin, Michael J (Springbum)


Cohen, Harry
Maxton, John


Connarty, Michael
Meale, Alan


Corbyn, Jeremy
Michael, Alun


Cousins, Jim
Michie, Bill (Shef'ld Heeley)


Cox, Tom
Miller, Andrew


Cunningham, Jim (Cov'try SE)
Mitchell, Austin (Gt Grimsby)


Dalyell, Tam
Morley, Elliot


Davies, Chris (Littleborough)
Morris, Ms Estelle (B'ham Yardley


Davis, Terry (B'ham Hodge H)
Mowlam, Ms Marjorie


Dewar, Donald
Mudie, George


Dixon, Don
Mullin, Chris


Dobson, Frank
Murphy, Paul


Dowd, Jim
Olner, Bill


Eagle, Ms Angela
Pickthall, Colin


Eastham, Ken
Pike, Peter L


Etherington, Bill
Pope, Greg


Fatchett, Derek
Powell, Sir Ray (Ogmore)


Faulds, Andrew
Prentice, Mrs B (Lewisham E)


Flynn, Paul
Primarolo, Ms Dawn



Quin, Ms Joyce


Fyfe, Mrs Maria
Raynsford, Nick


Gapes, Mike
Reid, Dr John


Garrett, John
Rendel, David


Godman, Dr Norman A
Robertson, George (Hamilton)


Gordon, Ms Mildred
Roche, Mrs Barbara


Griffiths, Nigel (Edinburgh S)
Rooney, Terry


Griffiths, Win (Bridgend)
Sheldon, Robert


Hain, Peter
Skinner, Dennis


Hall, Mike
Smith, Llew (Blaenau Gwent)


Hardy, Peter
Spearing, Nigel


Harvey, Nick
Spellar, John


Hattersley, Roy
Steinberg, Gerry


Henderson, Doug
Sutcliffe, Gerry


Heppell, John
Taylor, Mrs Ann (Dewsbury)


Hill, Keith (Streatham)
Timms, Stephen


Hinchliffe, David
Touhig, Don


Hoey, Miss Kate
Vaz, Keith


Howarth, Alan (Stratf'd-on-A)
Welsh, Andrew


Hoyle, Doug
Williams, Alan W (Carmarthen)


Jones, Barry (Alyn &amp; D'side)
Wise, Mrs Audrey


Jones, Dr L (B'ham Selly Oak)
Worthington, Tony


Jones, Martyn (Clwyd SW)
Wright, Dr Tony


Jones, Nigel (Cheltenham)



Kaufman, Gerald
Tellers for the Ayes:


Khabra, Piara S
Mr. Eric Clarke and


McAllion, John
Mr. Joe Benton.




NOES


Ainsworth, Peter (E Surrey)
Bottomley, Peter (Eltham)


Alison, Michael (Selby)
Bowden, Sir Andrew


Amess, David
Bowis, John


Arbuthnot, James
Boyson, Sir Rhodes


Arnold, Jacques (Gravesham)
Brandreth, Gyles


Atkins, Robert
Brazier, Julian


Atkinson, Peter (Hexham)
Bright, Sir Graham


Baker, Nicholas (N Dorset)
Brooke, Peter


Baldry, Tony
Brown, Michael (Brigg Cl'thorpes)


Banks, Matthew (Southport)
Browning, Mrs Angela


Bates, Michael
Bruce, Ian (S Dorset)


Batiste, Spencer
Burns, Simon


Bellingham, Henry
Burt, Alistair


Bendall, Vivian
Butcher, John


Beresford, Sir Paul
Butler, Peter


Biffen, John
Carlisle, John (Luton N)


Body, Sir Richard
Carlisle, Sir Kenneth (Linc'n)


Bonsor, Sir Nicholas
Carrington, Matthew


Booth, Hartley
Carttiss, Michael


Boswell, Tim
Cash, William






Channon, Paul
Jones, Robert B (W Herts)


Chapman, Sir Sydney
Jopling, Michael


Churchill, Mr
Key, Robert


Clappison, James
King, Tom


Clark, Dr Michael (Rochfd)
Knight, Mrs Angela (Erewash)


Clifton-Brown, Geoffrey
Knight Greg (Derby N)


Coe, Sebastian
Knight, Dame Jill (Edgbaston)


Congdon, David
Knox, Sir David


Conway, Derek
Kynoch, George


Coombs, Anthony (Wyre F)
Lait, Mrs Jacqui


Coombs, Simon (Swindon)
Lang, Ian


Cope, Sir John
Lawrence, Sir Ivan


Cormack, Sir Patrick
Legg, Barry


Couchman, James
Leigh, Edward


Cran, James
Lester, Sir Jim (Broxtowe)


Currie, Mrs Edwina
Lidington, David


Curry, David
Lilley, Peter


Davies, Quentin (Stamfd)
Lloyd, Sir Peter (Fareham)


Deva, Nirj Joseph
Lord, Michael


Devlin, Tim
Luff, Peter


Douglas-Hamilton, Lord James
Lyell, Sir Nicholas


Dover, Den
MacGregor, John


Duncan, Alan
MacKay, Andrew


Duncan Smith, lain
Maclean, David


Dunn, Bob
Madel, Sir David


Elletson, Harold
Maitland, Lady Olga


Evans, Nigel (Ribble V)
Malone, Gerald


Evans, Roger (Monmouth)
Mans, Keith


Evennett, David
Marland, Paul


Fabricant, Michael
Marlow, Tony


Fenner, Dame Peggy
Marshall, Sir Michael (Arundel)


Field, Barry (Isle of Wight)
Martin, David (Portsmouth S)


Fishbum, Dudley
Mawhinney, Dr Brian


Forman, Nigel
Merchant, Piers


Forsyth, Micnael (Stirling)
Mills, lain


Forth, Eric
Mitchell, Andrew (Gedling)


Fowler, Sir Norman
Mitchell, Sir David (NW Hants)


Fox, Sir Marcus (Shipley)
Montgomery, Sir Fergus


Freeman, Roger
Needham, Richard


French, Douglas
Nelson, Anthony


Fry, Sir Peter
Newton, Tony


Gale, Roger
Nicholls, Patrick


Gallie, Phil
Nicholson, David (Taunton)


Gardiner, Sir George
Norris, Steve


Garnier, Edward
Oppenheim, Phillip


Gill, Christopher
Ottaway, Richard


Gillan, Mrs Cheryl
Paice, James


Goodlad, Alastair
Patnick, Sir Irvine


Goodson-Wickes, Dr Charles
Pattie, Sir Geoffrey


Gorst, Sir John
Pawsey, James


Greenway, Harry (Ealing N)
Peacock, Mrs Elizabeth


Greenway, John (Ryedale)
Pickles, Eric


Griffiths, Peter (Portsmouth N)
Porter, David (Waveney)


Grylls, Sir Michael
Portillo, Michael


Hampson, Dr Keith
Rathbone, Tim


Hanley, Jeremy
Redwood, John


Hargreaves, Andrew
Renton, Tim


Haselhurst, Sir Alan
Riddick, Graham


Hawkins, Nick
Robathan, Andrew


Hawksley, Warren
Roberts, Sir Wyn


Hayes, Jerry
Robertson, Raymond S (Ab'd'n S)


Heald, Oliver
Robinson, Mark (Somerton)


Hendry, Charles
Roe, Mrs Marion


Heseltine, Michael
Rowe, Andrew


Hill, Sir James (Southampton Test)
Rumbold, Dame Angela


Hordern, Sir Peter
Sackville, Tom


Howard, Michael
Scott, Sir Nicholas


Howell, Sir Ralph (N Norfolk)
Shaw, David (Dover)


Hunt, David (Wirral W)
Shaw, Sir Giles (Pudsey)


Hunter, Andrew
Shephard, Gillian


Hurd, Douglas
Shepherd, Sir Colin (Herefd)


Jack, Michael
Shersby, Sir Michael


Jenkin, Bernard (Colchester N)
Sims, Sir Roger


Jessel, Toby
Skeet, Sir Trevor


Johnson Smith, Sir Geoffrey
Smith, Tim (Beaconsfld)


Jones, Gwilym (Cardiff N)
Speed, Sir Keith





Spencer, Sir Derek
Trend, Michael


Spicer, Sir Jim (W Dorset)
Twinn, Dr Ian


Spink, Dr Robert
Vaughan, Sir Gerard


Spring, Richard
Viggers, Peter


Sproat, lain
Waldegrave, William


Squire, Robin (Hornchurch)
Walden, George


Stanley, Sir John
Walker, Bill (N Tayside)


Steen, Anthony
Waller, Gary


Stephen, Michael
Ward, John


Streeter, Gary
Wardle, Charles (Bexhill)


Sweeney, Walter
Waterson, Nigel


Sykes, John
Watts, John



Wells, Bowen


Tapsell, Sir Peter
Whitney, Ray


Taylor, Ian (Esher)
Whittingdale, John


Taylor, John M (Solihull)
Widdecombe, Miss Ann


Taylor, Sir Teddy
Wiggin, Sir Jerry


Temple-Morris, Peter
Wilshire, David


Thomason, Roy
Winterton, Nicholas (Macclesfld)


Thompson, Sir Donald (Calder V)
Wolfson, Mark


Thompson, Patrick (Norwich N)
Wood, Timothy


Thumham, Peter
Young, Sir George


Townend, John (Bridlington)



Townsend, Cyril D (Bexl'yh'th)
Tellers for the Noes:


Tracey, Richard
Dr. I Jam Fox and Mr. Patrick McLoughlin.


Tredinnick, David

Question accordingly negatived.

Lords amendment agreed to.

Lords amendments Nos. 289 to 296 agreed to.

Schedule 10

ADMINISTRATION OF HOUSING BENEFIT

Lords amendment: No. 297, in page 160, line 35, at end insert—
("( ) For subsection (5) (agreements with other authorities for carrying out of functions) substitute—
(5) Authorities may—

(a) agree that one shall discharge functions relating to housing benefit on another's behalf, or
(b) discharge any such functions jointly or arrange for their discharge by a joint committee.
(5A) Nothing in this section shall be read as excluding the general provisions of the Local Government Act 1972 or the Local Government (Scotland) Act 1973 from applying in relation to the housing benefit functions of a local authority.".")

Mr. Clappison: I beg to move, That this House doth agree with the Lords in the said amendment.

Madam Deputy Speaker (Dame Janet Fookes): With this, it will be convenient to discuss also Lords amendments Nos. 298 and 299.

Mr. Clappison: The purpose of these amendments is to clarify the provisions that enable an authority to carry out housing benefit functions on behalf of or jointly with one or more other authorities and to introduce flexibility in the payment of housing benefit subsidy where authorities agree to combine activities.

Lords amendment agreed to.

Lords amendments Nos. 298 to 329 agreed to [one with Special Entry].

WATER POLICY

Motion made, and Question proposed,

That this House takes note of European Community Documents Nos. 5939/96, on European Community water policy, and 8600/94, on ecological quality of water: and endorses the Government's objective of ensuring that the Commission's review of European water policy provides for the proper assessment of water priorities, including the evaluation of costs and benefits of different policy measures.—[Mr. Conway. ]

Amendment proposed: at the end of the Question, to add—
'and calls on Her Majesty's Government to invite the Governments of each Member state of the European Community, together with the Governments of adjacent states, to embark on an international study of their respective policies and systems of hydrological regulation, with a view to publishing conclusions on mutually acceptable systems of control, surveillance, specification or standards of water quality.'.—[Mr. Spearing.]

Question, That the amendment be made, put forthwith, pursuant to Standing Order No. 102 (European Standing Committees), and negatived.

Main Question put and agreed to.

OFFICE COSTS ALLOWANCE

Resolved,
That, in the opinion of this House, paragraph (1) of the Resolution of this House of 10th July 1996 about the Office Costs Allowance should be treated as if the words after '£11,591' had not been included.—[Mr. Conway.]

PETITION

Bierley Estate

Mr. Gerry Sutcliffe: I present to the House a petition on behalf of the residents of the Bierley estate in Bradford and associated areas, on which there are more than 2,000 names. It declares that they are opposed to Bradford community health trust's proposal to redevelop the site of Bierley Hall hospital as a medium secure unit, and concludes:
Your Petitioners therefore humbly pray your Honourable House to urge the community health trust and the community health council to note the opposition of local residents and local elected Members and consider alternative plans for the redevelopment of the site.

To lie upon the Table.

Schools (East Dartford)

Motion made, and Question proposed, That this House do now adjourn.— [Mr. Conway.]

Mr. Bob Dunn: I am delighted to have the opportunity to raise the issue of school places in east Dartford. I do so because I am concerned and alarmed that the educational infrastructure of east Dartford is not apparently being developed as fast as it should, to take account of the current growth in the school-aged population and the tremendous growth yet to occur given the planned expansion in houses and jobs along the Kent Thameside area in my constituency and north of the A2.
There is a problem in east Dartford, with the demand for places in local primary schools well outstripping supply. In some—in fact, too many—instances, and despite the appeals system, parents with children in primary schools in east Dartford and on Temple Hill have failed to secure placements for siblings in the school attended by the first child.
For too many parents, places have been made available for second and subsequent children in schools in central and west Dartford, which poses problems for families in which the mother has no private means of transport. The mother is faced with the prospect of collecting and delivering one child to a school on the east of Dartford, while being expected to collect and deliver another at the same or similar time to a school in the west of Dartford. To do so is impossible, yet schools on the east of Dartford are full. At least one school has, through its governing body, made representations to me and the local education authority on the difficulty of coping with over-subscription on a large scale.
If Dartford were a static community, it would be easy to dismiss the upsurge in the school-aged population as a temporary phenomenon. However, it is not: it is dynamic and, to date, there has been a significant increase in new housing in the eastern and riverside areas of the borough of Dartford—thus the upsurge in the numbers of young children is augmented by families who have moved into the local authority area. The problem exists now, and needs to be dealt with now. It will only get worse in the Thames gateway area, as more and more development proceeds.
The local education authority has addressed the problem to a point by increasing the size of schools in and around central Dartford, with some enlargement in Stone and at the Brent. A new primary school is planned for the Bexley hospital site to the west, as is one in Swanscombe, but I fear that all this enlargement and new build is inadequate to eliminate the problem. A new secondary school is also planned in the Swanscombe-Greenhithe-Stone area, which is welcome but, I fear, inadequate given the time scale necessary for taking forward new build.
I hope that I am wrong in my fears, but I am of an age to remember the example of the Kirkby estate in the former Huyton constituency that was represented for many years by the late Lord Wilson. Kirkby was a huge 1950s overspill estate, built to rehouse Liverpool people from the slums and to provide housing for those whose homes had been lost in the second world war. The estate was big, but it was only after some time that the planners


realised that, although they had built much-needed houses, they had forgotten to provide infrastructure for schools, for leisure and for the elderly.
It is inconceivable that the problems of Kirkby should be visited upon north Dartford, and I believe that the Thames gateway is a huge success. But equally I would be failing in my duty as the hon. Member for Dartford if I did not remind the House of the need for decisions to be taken now to secure local sites for education, for the elderly and for leisure.
Much is being done, and has been done, locally, but the co-ordination of forward planning needs to be made crystal clear to the people I represent. Given that from three to five secondary schools and eight to 10 primary schools are needed, I ask my hon. Friend to intervene to help prevent the growth of a problem.
However, before I list my needs, may I inform the House that I wrote to my right hon. Friend the Secretary of State for Education and Employment on 26 May 1995 about the implications of the Thames gateway project? My right hon. Friend pointed out in a letter to me on 21 June
My role will be to consider on their merits any statutory proposals which result from this and to determine the level of capital support that can be made available to support the expansion of provision. I understand that at least some of the basic need places we recognised in the most recent capital round for the Dartford area were as a result of the initial stages of this development.
I entirely agree with her, but the problem is now more pressing than when I wrote to her last year, given the rapid pace of development.
I wish to put three points to my hon. Friend the Minister. Will she commit her officials to a real evaluation of the educational needs in my constituency, given the implications of the Thames gateway project? Will she ensure that, after such an audit, she will arrange such liaison as is necessary between the various agencies so as to minimise the time from concept to school opening? Finally, will she inform my right hon. Friend the Secretary of State—who offered on 21 June last year to meet me and such a deputation as I could put together to discuss the problems—that we would like to take up the opportunity to visit the Department to discuss at first hand the particular needs and problems faced by my constituents?
I wish to assure my constituents that the House is now aware of the problems they face, and that action is urgently needed. I will do all I can to minimise the conflicts that exist, until such time as new provision is made.

The Parliamentary Under-Secretary of State for Education and Employment (Mrs. Cheryl Gillan): I am extremely grateful to my hon. Friend the Member for Dartford (Mr. Dunn) for drawing this important matter to the attention of the House. He is formidable in pursuing the interests of his constituents on every occasion—not least in education. I hope that, by the time I sit down, I will have answered him fully and given him the help that he seeks.
I know that this debate has been prompted by issues that have caused my hon. Friend great concerns—the problems that his constituents have experienced in getting

their children into local schools, and their concerns about the lack of primary school places generally in the east Dartford area.
It is perhaps worth reminding ourselves just how much progress has been made in this area since the present Government took office in 1979. At that time, of course, parents had no say at all in deciding which school their child would attend. Schools could be kept half-empty, but parents would still not be offered a place, and there was certainly no right to appeal against decisions that others had made about the school placement of their children.
Under the arrangements progressively introduced by this Government, parents now have a clear and unequivocal right in law to express a preference for the school they wish their child to attend. Admission authorities—that is, governing bodies of grant-maintained and voluntary-aided schools, and the local education authority for county and controlled schools—must comply with that preference if places are available. The only exceptions to this are denominational schools and selective schools, which may keep places open in order to preserve their particular character.
However, if a school is over-subscribed, it may be that parents do not receive a place since the school can be filled with pupils with better claims for places. It is up to the admissions authority to organise the over-subscription criteria to judge between the claims of candidates for places. Admission authorities may use any lawful criteria in taking decisions about whom to admit.
Under our policy of more open enrolment, schools must admit up to their standard number, or any higher admission limit set. As a result, admission authorities can no longer keep spare places at popular schools to safeguard the viability of other, less popular ones. The bottom line is that, if a school has spare places, eligible children must be admitted.
Parents now have more rights, more information and more access to a wider choice of different schools than ever before. What the Government have tried to do is remove the artificial barriers that, in the past, have all too often stood in the way of parental choice. Evidence suggests that some 90 per cent. of first-choice applications are successful.
Where parents are unsuccessful in gaining a place, they may if they wish exercise their rights to appeal to an independent appeal committee. Appeal committees offer parents an important second chance. They must consider any appeal in the light of the evidence available and the merits of the case before them. Nationally, around 40 per cent. of appeals are successful.
All appeals committees must now contain a lay member, and representatives of the admission authority cannot be in the majority. As a result, parents can now have more confidence that their appeals will be heard by an independent and impartial panel who will carefully weigh up the needs of the child against the implications for the school.
I can understand the concern of my hon. Friend the Member for Dartford about the problems that some of his constituents have experienced in getting their children into their local school. I know, too, that he has written to my right hon. Friend the Secretary of State for Education and Employment about this matter on several occassions.
But these problems are not new. It is impossible to guarantee admission where many more parents have expressed a preference for a school than there are places


available. What we have tried to do is put in place a framework that ensures that responsibility for admissions rests with individual admission authorities, who we believe are best placed to respond to the wishes and needs of parents and pupils.
As I understand it, parents whose children have been refused admission to schools in east Dartford have been offered places at schools in west Dartford. In some cases, these alternative schools are little more than a mile away from where parents live. However, I sympathise with the travel difficulties of parents, which were described so graphically by my hon. Friend.
I now turn to the issue of the supply of school places. My hon. Friend the Member for Dartford will be aware that Kent is a stage 1 authority for the primary sector. Despite the large number of grant-maintained secondary schools in the county, less than 10 per cent. of Kent's primary school population is in grant-maintained schools. That means that Kent local education authority has sole responsibility for ensuring that there are sufficient primary school places in its area for pupils of compulsory school age.
The authority estimates that 5,000 primary school age places will be needed over the next 10 years in the Thames gateway area. Clearly, Dartford is in this growth area, and we have recognised this. In the 1994–95 bidding round for capital funding, we accepted a basic need case for 260 additional primary school places in Dartford and a further 300 primary places the following year. In the 1996–97 capital round, Kent LEA was given an educational capital guideline of over £23 million—by far the largest in the country. That represents 40 per cent. of the authority's total bid—significantly above the national average of 23 per cent. and reflects the extent to which its plans for spending on schools matched the national priority criteria.
Nevertheless, it is for LEAs to decide their capital expenditure priorities and make the best use of the resources available to them. The annual capital guidelines announced are not tied to particular projects, nor do they represent the full total of resources available to LEAs for capital spending: LEAs can invest their capital receipts and can use funds from their revenue budgets for capital purposes if they wish. The Government do not control the funding of individual projects at county or voluntary-controlled schools. I hope that the LEA will take note of what my hon. Friend said tonight.
To fulfil its planning responsibility to ensure a sufficient number of school places, Kent LEA has the power to publish statutory proposals. It can publish them to establish entirely new schools or to make significant enlargements to existing schools. It would be for my right

hon. Friend the Secretary of State to consider any proposals that fall to her for decision. However, the LEA can, of course, make non-significant enlargements to existing schools without approval from her. I understand that the authority is considering the need for new primary places in the Dartford area and consulting locally on how to provide 210 additional places.
Governing bodies of grant-maintained schools can make proposals to enlarge their schools. My hon. Friend may recall that two GM primary schools in his constituency followed the statutory procedures and received approval from my right hon. Friend the Secretary of State for enlargement: Holy Trinity Church of England GM primary, with effect from September 1995; and Horton Kirby Church of England GM primary from September this year.
As my hon. Friend knows, our recently published White Paper proposes that grant-maintained schools should not in future need approval to enlarge their current capacity by up to 50 per cent. It also proposes that, when a new school is needed to meet a shortage of school places, power is given to the Funding Agency for Schools to submit proposals for a new GM school alongside any proposals from the LEA.
Although that would not change the planning responsibility of the LEA to ensure the provision of sufficient places in stage 1 authorities, it should help to promote a wider choice in the range of provision available. Of course, we would consider all proposals on their individual merits. Circumstances will vary in each case, and my right hon. Friend the Secretary of State will take account of all the relevant factors. However, as a matter of general policy, she would favour proposals that enhance diversity.
Let me assure the House that it remains our policy to allow schools to have more freedom to develop in response to popular local demand as well as to increase parental choice. Children have different abilities, aptitudes, interests and needs, which cannot all be met by a single sort of school. The Government want parents to be able to choose from a range of good schools of different sorts, matching what they want for their child with what a school offers. I am confident that that can be achieved in the Dartford area.
Finally, as my hon. Friend appreciates, the issues that he has raised will not be solved overnight, but my Department and my officials stand ready to help. Should he wish to bring a delegation to the Department, I would be only too happy to meet it.

Question put and agreed to.

Adjourned accordingly at eight minutes to Nine o'clock.